Abolishing Performance Appraisals: Why They Backfire and What to Do Instead

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Performance appraisals are used in the overwhelming majority of workplaces. Yet, most organizations that use appraisal-and a similar percentage of givers and receivers of appraisal-are dissatisfied with the process. Many are beginning to deeply question whether appraisal is necessary and consistent with the work culture espoused by progressive organizations. Abolishing Performance Appraisals provides an insightful, well documented look at the flaws of appraisal-including its destructive, unintended effects-and offers practical guidance to organizations that want to move on to more progressive approaches to coaching, feedback, development, and compensation. While many books prescribe cures for appraisal, this is the first to focus exclusively on eliminating appraisal altogether and creating alternative, non-appraisal approaches based upon progressive and healthier assumptions about people. The authors expose and dispel the widely accepted myths and false assumptions that underlie common management strategies surrounding the five key functions of appraisal-coaching, feedback, development, compensation, and legal documentation. They then offer step-by-step practical guidance on implementing alternative non-appraisal strategies that deliver the objectives of each function. And they suggest ways to give supervisors and managers the freedom to choose for themselves the most effective ways of working with people. Filled with real-life examples, resources, tools, and detailed practical advice, Abolishing Performance Appraisals is an entirely fresh and radically different view of performance appraisal and its functions that will help people start over and discover new and more effective approaches.

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1 Good Intentions That Never Deliver

ePub

It is not enough to change strategies, structures, and systems, unless the thinking that produced those strategies, structures, and systems also changes.

Peter Senge, The Dance of Change

It seems quite probable, as we continue to question our current practices, that most systems of performance appraisals… will be unmasked as detrimental to human spirit.

Dick Richards, Artful Work

Abolish performance appraisal. Yes, it feels uncomfortable to say that. Appraisal represents the conventional wisdom. We’ve grown accustomed to it, in spite of its inevitable flaws. Letting go of it feels like we’re going on a course to abandon people and their needs—the need for feedback, good coaching and development, the need for a measuring stick so people and the organization can know where people stand.

Our discomfort is quite natural. It stems from the truly good intentions behind appraisal. Abolishing appraisal does not mean abandoning its good intentions. It is diametrically the opposite—it is about getting serious about those intentions and finding pathways that can deliver without bringing on the perennial problems of appraisal. In this chapter, we separate the wheat from the chaff, keeping the worthy intentions of appraisal while we thresh out its structures and underlying beliefs. It is those potent beliefs and the resulting structures that ensure failure and the unintended toxic side effects.12

 

2 The REAL Goal: Improving the Performance of the Organization

ePub

We live our lives in webs of interdependence and yet we keep telling ourselves the story that we are independent.

Peter Scholtes

With any turn of a century, it is common for new possibilities to emerge, new approaches to become common practice, new philosophies of living to become popular, and new qualities of leadership to give birth to a new world.

Robert Fritz, The Path of Least Resistance

As the nineteenth century came to a close, the horse and buggy was the prevailing mode of transportation. The automobile was viewed as an expensive amusement. People laughed at the possibility of the sturdy, reliable horse and buggy being replaced by a mere machine. With the dawn of the new century, however, the automobile quickly emerged as the preferred choice in transportation. The horse and buggy became an amusement.

And now, having closed the twentieth century, this book proclaims that the performance appraisal is just another “horse and buggy” to be left in the past (though the track record of the horse and buggy was far superior!). Yet, appraisal is still a widely used tool in workplaces that are radically different than those of 100 years ago, 50 years, or even 20 years ago. The appraisal survives more out of unfounded belief and habit than any demonstration of success. As the prevailing paradigm of organizational life continues to shift, the inherent flaws of the performance appraisal are becoming increasingly evident. 34

 

3 Appraisal As a Rating Tool: Fair or Foul?

ePub

Detailed studies of performance appraisals show that at their best they are often wildly inconsistent and damaging to the loyalty and commitment that help people do their best.

Jay Mathews, Washington Post

Rater distortions of employee appraisals and employee attempts to embellish apparent performance are facts of organizational life that can never be completely eliminated.

Steve W. J. Koslowski, Georgia T. Chao, and Robert F. Morrison, Performance Appraisal

At the heart of many appraisal functions is an assessment, an evaluation of performance. Typically this takes the form of numeric or descriptive ratings or a ranking. The goal is fair and “objective” measurement—measurement of the quality of one’s work and how it stands up against some standard or in comparison to others. The ratings must be reliable and fair because they are used for important purposes. They decide pay adjustments and bonuses. They determine whether someone can move up on the career ladder. Within competitive, internal promotion processes, screening committees rely on ratings to choose the interview pool and even to select a group of finalists. Ratings also serve as a coaching, feedback, and development tool. They tell individuals in a tangible, concrete way the precise value of their contribution and performance, or at least that’s the intent. An unacceptable rating in many organizations triggers remedial measures and even formal disciplinary steps that may lead to discharge. In sum, a lot is riding on ratings. 54

 

4 Coaching Employees In the New Workplace

ePub

I have nothing but confidence in you—and not much of that!

Groucho Marx

Leadership must move from the performance appraisal system to appraisal of the performance of the system.

Ronald D. Moen, Quality Progress

Coaching. Once a buzzword metaphor, it now capsulizes everything a good supervisor is supposed to do. It’s an easy concept to endorse because it has no particular meaning—it means one thing to one person and something else to another. Rarely do we take time to think about or clearly state what we mean by coaching. Nor do we ask the important questions: Through coaching, what are we trying to accomplish? What are its processes? And who is responsible to ensure that people get the coaching they really need?

Despite a variety of perspectives about coaching, there’s one overriding trend pertaining to the concept of coaching—it’s called performance appraisal. Nearly every design of appraisal touts that it is an effective coaching tool. Appraisal is proclaimed as the instrument that facilitates coaching. It’s prescribed by well- meaning H.R. departments to ensure that supervisors are doing their job in coaching, guiding, and developing employees. But does it help? Or does it get in the way? 74

 

5 Feedback That Makes a Difference

ePub

Ultimately, managers aren’t responsible for their people’s performance. People are responsible for their own performance. There’s feedback all around you—if you pay attention. If you’re not getting enough feedback, ask for it.

Anne Saunier, Fast Company

In any well-functioning organization, anyone ought to feel free to give anyone else feedback.

Peter Quarry, Feedback Solutions

Giving good feedback. Everyone thinks it is important. It’s what supervisors are supposed to do. If supervisors were organized like Boy Scouts, “to give good feedback” would be the first item of the official oath. And while everyone acknowledges its value and importance, timely and helpful feedback is conspicuously absent for most people in organizational life. The “art” of feedback is seldom practiced by many, and when practiced, it is practiced badly. In large part, the culprit is the prevailing practice of appraisal, which engenders many false notions about the nature of feedback. Beyond appraisal, many of us fail at giving and receiving feedback because we do not understand its true dynamics. Our expectations of feedback are unrealistic, and we fail to see the barricades that obstruct and distort the flow of communication and openness to change. 116

 

6 How Do We Pay People Without Appraisals?

ePub

The answer to the question managers so often ask of behavioral scientists—”How do you motivate people?”—is, “You don’t.”

Douglas McGregor, The Human Side of the Enterprise

Human beings are more alike than unalike. Whether in Paris, Texas or Paris, France, we all want to have good jobs where we are needed and respected and paid just a little more than we deserve.

Maya Angelou

Many organizations use appraisal to drive pay decisions, or at least this is the common belief. They use appraisal because they want to tie contribution to pay. They do this because they believe this will motivate people to do their best. They further believe that paying according to contribution is only fair, it’s the right thing to do.

In this chapter we try to sort out the way all of us think about pay, motivation, and work. We attempt to bring into plain view our accepted notions and personal beliefs about pay and stack them up against our experiences and how they play out in the real world. More important, we invite you to discover, within yourself, intuitively known truths that do not reconcile well with the “givens” we take for granted relative to pay and motivation.

 

7 Staffing, Promotions, and Development

ePub

There is no need to institutionalize the process of helping people with their future. The way to decrease someone’s dependency on us is to keep clear that their future is in their hands.

Peter Block, Stewardship

Employees need to take personal responsibility for their own career development.

Paul Squires and Seymour Adler, Performance Appraisal

Like compensation, career advancement is a sensitive issue. Depending on the individual and how things turn out, it may be a motivating factor or a de-motivating factor. When people talk about a good employer, one of the first things they often mention is opportunities for promotion—they say the selection process is open and fair, or proudly exclaim, “Our company promotes from within.” On the other hand, perceived unfairness in advancement drastically impairs loyalty, commitment, and motivation. To keep employees happy, and to comply with civil rights laws, employers increasingly are relying on “objective” processes and tools for promotion and career advancement. A good many organizations, in varying degrees, rely on appraisals to screen and select applicants because of its objective appearance.

 

8 Dispelling the Legal Myths and Dealing With Poor Performers

ePub

If you really want to help people change, empathize with them.

Carl Rogers

I don’t have an attitude problem. You have a perception problem.

Dilbert (Scott Adams)

When we talk to audiences about tossing performance appraisal, invariably we see someone’s eyebrows furrow, and a hand goes up. “Well, what about legal documentation,” the voice of concern asks, “In these days, don’t you need appraisals to protect the company from employee lawsuits?” Our answer surprises audiences: There is far more fable in that belief than truth.

In this chapter, we sift the truth from commonly held beliefs. We identify the few instances when appraisal or formal evaluation is legally mandated. We also dispel the widely held notion that appraisal provides a reliable shield against employee lawsuits, delineating the kind of documentation that is prudently necessary. Lastly, we shed light on the value of appraisal as a counseling tool for errant employees. In all of these discussions, we once again focus on underlying assumptions to help us better understand why we have relied upon appraisal. We pose alternative assumptions from which we can craft new practices to encourage effective counseling of sub-par employees and the prudent collection of legal documentation. 224

 

9 Disconnecting Appraisal and Designing Alternatives

ePub

The realization of ignorance is the beginning of wisdom. You will find that the more you realize you don’t know, the more you will understand.

G. I. Gurdjieff, Teachings of Gurdjieff

If everyone desired to do his or her job correctly and on time, and could be trusted to act with integrity and in support of the firm’s aims and goals, what would your organization’s processes and procedures look like?

Dr. John Whitney

When we talk to audiences about abolishing performance appraisals, in greater and greater numbers we see nodding heads and ready acceptance of this idea. This reaction is not surprising considering the high rate of dissatisfaction with the process. Invariably we also find audiences very anxious to get to the next step—What do you do instead? It seems our audiences expect us to hand out a list of steps along with forms that they can copy and go back and implement the following Monday. If you’re of the same mindset, we’re sorry to break your bubble—there are no best practices or processes that you can just copy and implement. If you want genuine, lasting success in transforming to a workplace culture without appraisal, you must roll up your sleeves, gather a team of passionate people, and do the hard work of designing with a clean sheet of paper. Anything less is a waste of your energy and a surefire recipe for failure. 258

 

10 Creating Consensus and Confidence for Change

ePub

The last thing we ought to do is replace existing ideas about organizations with yet another idea and go on as we have before believing we have the solution.

Dick Richards, Artful Work

People may genuinely become excited by a beautiful idea and even support it wholeheartedly. But as the idea moves closer to implementation, insecurity and self-doubt set in. The supporters of the idea may then subconsciously sabotage their own efforts to prevent the change.

Jamshid Gharajedaghi, Systems Thinking

In organizational life, a good idea on paper hardly bodes success. Too often, good ideas bite the dust long before they are tried or brought to fruition. To succeed, a good idea must run an obstacle course, jumping hurdles and climbing over formidable barriers. The bigger the organization, the bigger the obstacles. Organizations are structured for stability and homeostasis, not change. Organizations are ingrained to play it safe. Change is risk. And we who work in organizations, as human beings, are also resistant to change. It’s both a natural and learned response. Change brings the unforeseen, and this engenders fear. Things could get worse. So, we have a predilection to stay with the devil we know. We also resist change because breaking patterns requires a great deal of mental effort and emotional energy—it seems easier to endure the present mediocrity and misery. 284

 

What the Sages Say On Performance Appraisal and Related Issues

ePub

Filling out a form is inspection, not feedback.…History has taught us that relying on inspection is costly, improves nothing for very long, and makes the organization less competitive.…Anyone who equates delivering feedback with filling out forms has lost the battle for smart appraisal before it’s begun.1

Evidence has been accumulating for years that performance appraisal systems, no matter how well designed, do not differentiate employees sufficiently to make valid and reliable compensation, promotion, and layoff decisions. They do not necessarily even lead to better coaching. Instead these systems have become bureaucratic nightmares and have put human resources professionals in the role of “cop.”2

The performance review, no matter how well the format is designed, is a one-way street. Someone the individual didn’t select gets to perform a very personal internal examination. There are no certificates on the wall stating the qualifications of the reviewer. Yet the effect on the individual’s present and future is as real as if everyone knew what he or she were doing.…The reviews, which are supposed to give information to management about employees, do the reverse. The employees quickly realize that management has no way of knowing who is the fairest of them all, except through luck and instinct.3

 

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