Editor's Note: Engineer, Author and Management Consultant W. Edwards Deming had some things to say about performance appraisal; particularly the evaluation of people without considering the context in which they are attempting to succeed. Organizational psychologist Ben Dattner agrees - and expands - on this topic. Are we overlooking a way to make performance management more dynamic?
W. Edward Deming famously called out performance appraisal as on of the Seven Deadly Diseases of Western Management. One of his key objections to the practice was his assertion that 90 to 95 percent of what we often "mistake" as individual performance is, in fact, attributable to the systems in which people work.
Dr. Deming was correct in pointing out that most performance management systems - and individual goal setting processes - focus on the person and not the situation. Organizational psychologist Ben Dattner, in a HBR Blog post, uses this reality as the jumping off point for his claim that organizations could achieve greater accuracy in evaluating employee performance by considering both the person and the context of performance. Doing so, he notes, would reduce noise and bias and bring other advantages to the table.
First, it's simply more accurate. If the evaluation system takes into account that one employee had an easy product to sell and another did not, the system can begin to differentiate how much the results were due to the individual employees, and how much the results were due to the products they were selling. Second, it allows the company to identify underlying factors that may be affecting employee performance. For instance, in a performance appraisal system that only evaluates employees — not situations — the organization may take longer to realize that the problem is its IT infrastructure, not the effort or ability of the people using the technology. Finally, employees will perceive their performance appraisals as fairer and less biased. Ample research has shown that perceptions of fairness are a key driver of employee motivation, job satisfaction, organizational commitment and cohesion, and retention.
I agree that the inability of most performance management programs to take situational factors sufficiently into account (beyond what managers attempt to do informally and implicitly) is one of the biggest obstacles to making this essential business process successful. And since situational factors (in both the organization's internal and external environments) move more quickly and less predictably today than they likely did in Deming's day, I think this obstacle has only become bigger and more problematic over time.
Dattner shares some basic suggestions for incorporating context into new or existing performance programs - such as adding a column to the appraisal form, for both employee and manager input, that asks either "What were the situational factors that made it easier or harder for this employee to achieve his or her goals?" or "What systems, processes, structures, circumstances or events facilitated or constrained this employee's performance?" Practically speaking, I imagine that the insights or observations called out here could be either factored informally into the manager's performance conclusions or (in more formulaic systems) used to "qualify" a performance score along a range that might extend from, say, 80 to 120 percent.
What's your take? Can - would - incorporating context into goal setting and performance appraisal processes better position them for success in a dynamic and fast changing world? How many of you have taken this step already ... and what can you share about your experience with us?
Ann Bares is the Founder and Editor of Compensation Café, Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting and survey administration services to a wide range of client organizations. She earned her M.B.A. at Northwestern University’s Kellogg School and enjoys reading in her spare time. Follow her on Twitter at @annbares.
Creative Commons image "2005050540010" by championsukplc
Yes, Performance Appraisal should be an objective assessments of the subject's ability to cope with context. Did they maximize the advantages and overcome the obstacles affecting their leverage position?
Overlaying the Mager-Pipe Performance Model with the individual's responses to those circumstances would be far superior to the generally terrible status quo practice. Expecting a naked worker to reach the North Pole without any supplies, equipment or transportation is dumb.
Most performance deficiencies stem from defects in the organizational system, not from anything under the control of the typically highly competent worker. A few superstars may successfully overcome the many obstacles created by the contextual circumstances the employer imposed on their positions. The majority, however, get a balky Model T mired in the mud and are rated accordingly. The lucky minority who fall into the seat of a smoothly running machine on a superhighway get high ratings with little effort, as long as they don't mess things up.
Fixing the context is the organization's responsibility; it is beyond the usually mundane talents of individual contributors.
You can't win races with flat tires and bad engines. Give everyone a good "vehicle" and they will all look like superstars!
Focus on what management did wrong to defeat all subordinate efforts, rather than blame the victims for not overcoming the obstacles they faced.
Maybe its a heresy that needs to be spoken. You can't fix problems whose existence is denied.
Posted by: E. James (Jim) Brennan | 11/14/2019 at 09:15 PM