Solving the Problems of Games We Play with Performance Appraisals

In my last post on Compensation Cafe, I wrote about the games we play with performance appraisals and salary increases.

What do we do instead if we agree to stop playing the games of:
1)    Relying on the Appraisal as the Primary Means of Feedback
2)    Ranking Performance
3)    Differentiating based on pay increases

Although many have advocated just dropping the performance appraisal, in reality these have become so embedded in the people process, removing the annual review entirely is simply not feasible or desirable in most organizations.

The answer to “what should we do instead?” lies in solving the inherent problems with the games we play in the first place:

1)    A general dearth of feedback in the workplace today

Complaints about Millennials and their need for constant feedback are misplaced. The true challenge is we’re all in desperate need of more feedback, but we’ve become so accustomed to the lack of praise or criticism that we’ve become comfortable working away in the hopes that our final product will be what is wanted.

Too often, this amounts to little more than spinning your wheels. How often have you completed a project, in this dearth of feedback environment, only to have to redo 90%? This must end. Think how much more productive you (and your employees) could be if your progress was validated, praised and, yes, corrected along the way.

Beyond this, think how much more motivated and engaged with your work you would be if you knew your efforts were appreciated and contributing to something greater.

2)    A company culture that tolerates head-in-the-sand management

At its root, a culture that allows once-a-year feedback in the form of a performance appraisal is a culture that encourages management malfeasance. Some will argue I’m being too strong. I don’t think I’m being strong enough. Allowing managers to sit behind closed doors and offer feedback on projects, performance or progress only once a year can be categorized in no other light.

Other writers better than I have written extensively about people promoted to management because they excelled in their individual contributor roles, not because they displayed any hallmarks of a good manager. Being a manager of people requires being able and willing to notice the work your employees do, the attitude with which they do it, and then praising or correcting them accordingly – in the moment. This takes presence, courage, foresight and insight.

Look around you. How many managers of people in your organization fit the bill?

3)    Reliance on too few tools for accurate performance assessment.

To give managers some credit, they often work within a system that doesn’t give them the means, methods or processes to assess and reward performance outside of the annual performance review or to include the assessments of colleagues and peers.

This is where the value of strategic employee recognition enters the performance assessment picture. If all employees are allowed and encouraged to express their appreciation for colleagues’ efforts – including specific information about how those efforts contributed to project, team, customer or company success – then those assessments can also be included in the review process.

Think of it this way. Would you rather rely on a once-a-year assessment from one person passing judgment, or on many assessments throughout the year from many people sharing appreciation?

How else would you recommend solving the problems we play with performance assessment? What other ways of assessing performance more accurately, fairly and frequently would you recommend?

Derek Irvine is Vice President of Client Strategy and Consulting for Globoforce, helping global companies set a higher ambition for global strategic employee recognition by leading workshops, strategy meetings and industry sessions around the world. Along with Globoforce CEO, Eric Mosley, Derek recently authored “Winning with a Culture of Recognition: Recognition Strategies at the World’s Most Admired Companies,” available through Amazon.com. Follow Derek on Twitter at @globoforce.

Comments

[E James (Jim) Brennan]

Yes, and let's improve the procedure by eliminating the fantasy games and engaging the real world of practical reality.

Would you manage someone by totally ignoring them aside from one contact all year long? And that at the very end only? Would you educate a student by teaching them with no feedback and only supplying one single assessment report with an overall grade at the end of their cirriculum?

The problem isn't really centered on the mere existence of a summary performance rating but on the process within which it resides and occasionally culminates. Having written a book on the topic (http://www.amazon.com/Performance-Management-Workbook-James-Brennan/dp/0136586341), I've had my say in the past. But the word still needs to get out, because the same errors continue to recycle. Well done! Keep preaching the basics!

[Derek Irvine, Globoforce]

Excellent analogy, Jim. How useless would a university class be to a student who received just one grade at the end of the semester, based solely on a final exam grade. Even more true in classes with 100+ students. And my American colleagues tell me just how much a university education costs -- what frightening waste of money that would be. And the same is true for the annual performance review.