Performance Appraisals: Resist the Temptation and Do These 6 Things Instead

The season for the performance appraisal — a dreaded but time-honored staple of business culture for 80 years — is upon us again.

Millions of employees face assessment of what they have or haven’t done during the year, and their managers will be challenged to fill out forms and lead uncomfortable meetings. If the past is an indicator (and we know it is), the process and results will do more harm than good.

Experience and scientific evidence have long convinced me that the best kind of performance appraisal is no formal appraisal at all. Several studies show that 80 percent of employees think they perform in the top 20 percent of the employee population, which means at least 60 percent of employees are dissatisfied with their performance ratings at a given time.

Yet the practice continues even though it’s generally agreed that it doesn’t achieve the intended goal: to help people perform better. Performance appraisals are doomed to failure, in part because they’re designed to benefit organizations rather than individual employees, and because they are most often based on traits rather than behaviors — what they aim to measure defies objective evaluation.

In some companies, such as the Jack Welch-era General Electric, Microsoft until recently and now Yahoo, appraisals use some form of ranking, resulting in dire consequences for those tagged deficient. This approach is flawed. It incorrectly assumes employees are hired according to a bell curve, and it labels and divides employees.

Other companies have tried reviewing performance more frequently, such as quarterly, but doing the wrong thing more often does not make it better. If you want to see improvement, try these things instead:

Turn the proposition around and hold the manager accountable. Recognize that appraisals really reflect on the performance of the manager, not the employee. Any assessment should be for the express purpose of helping the manager improve employee performance. Managers should be in place to help identify desired behaviors and coach the person in how to engage in those behaviors (See “Oops!”). They should be responsible for creating the conditions that help employees do the best job possible, and for finding ways to increase the productivity, quality and desired personal behaviors that contribute to the success of everyone on the team. To be most effective, they must have a scientific understanding of human behavior. A core skill for managers should be behavior shaping.

Focus on helping all team members perform as well as possible. Don’t create a system that identifies and eliminates weak links. Instead, the measure of success for a manager should not be on increasing the average performance, but rather on increasing the number of employees who are improving. Effective managers train all team members to help each other improve performance. 

Quickly replace managers who take credit for team accomplishments.  Any manager who brings attention to him/herself is a liability. Look for candidates who find their greatest joy in the success of others. It is difficult to create a successful team when the leader takes the credit.  Don’t just accept when managers say things like, “I couldn’t have done it without a great team.”  Observe the manager in action to see if he or she actually delivers reinforcement to his or her team.

Ask employees for help in solving problems. Approach employees frequently with “I need your help.” Soliciting and using suggestions and information supplied by all levels of employees is one of the surest ways to increase engagement in their work and the mission of the organization.

Engage employees in ongoing conversations. You should reinforce employees for approaching you with any question, even when it is not job related. It is an indicator of a positive relationship and that the employee respects your opinion, which is important for creating a loyal and engaged workforce.

Use positive reinforcement. Ask yourself if there are performance issues and if you can use positive reinforcement to help an employee address them. Learn how to pinpoint what the person needs to do to change and offer real-time feedback on specific behaviors. Often I am asked if you can do too much of this thing called positive reinforcement. The answer is, not if what you do or say is positively reinforcing.  If you do it wrong, one time is too much.

In addition to the above items, it’s important to keep in mind that the path toward strong performance management begins long before performance is appraised. It starts with hiring and promoting well. Companies need to hire team members with people skills, which include being approachable, friendly and focused on helping rather than looking for failure. These people-centered employees should be promoted within the organization. Simply promoting the highest performers may not provide managers who are ready and prepared to lead.

If you follow these suggestions, you’ll spare yourself and those you manage a great deal of performance appraisal angst — and your organization will see performance improve.