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Performance Appraisal

Part of Good Performance Management

Bob Ryan, About Purpose, Inc. ©1999

 

Understand that there is, and has been for a very long time, a raging debate on performance appraisals, their use, their reliability and their effect on both the individual and the organization. The biggest and most vocal opponent was none other than W. Edwards Deming. My own bias is that performance appraisals correctly constructed and judiciously used in connection with other performance management techniques, are positive and beneficial.

 

Here are some facts about performance appraisals, and some recommendations, gathered from a number of sources and melded with my own experiences, on both performance appraisals and performance management.

 

What it is and what it can do

 

What Performance Appraisal is:

 

Part of a good performance management system, which also includes:

 

• Clear position description with corresponding competencies
• Employment agreement
• Supervision
• Ongoing performance feedback
• Development planning

What a Performance Appraisal can do:

 

• Create opportunity to exchange feedback on job, job systems, knowledge, skills and abilities
• Create formal documentation of past performance
• Provide opportunity to broaden inputs into performance feedback from team mates, customers, direct reports and the like
• Help clarify the connections between competencies and behavior
• Gain insight into the work group’s effect on individual performance
• Set up a base from which to do future developmental planning

 

What it isn’t and what it cannot do

 

What it isn’t:

 

• It is not an effective performance management tool
• It is not a predictor of future behavior
• It is not a forum for conflict resolution
• It is not adequate documentation for disciplinary actions

What it can’t do:

 

• It can’t change or modify behavior
• It can’t stand on its own as a performance management tool
• It cannot substitute for good supervision
• It cannot take into account the work group’s effect on individual performance

So, there are the strengths and limitation of the performance appraisal. Now what does a healthy performance management system look like?

 

Steps to healthy performance management

 

1. A clear position description answers the questions:
   1. What is it that a person is hired to accomplish?
   2. What must be done in order to accomplish it?
   3. With whom must the person work and in what capacity to accomplish it?
   4. Who are the person’s key customers and key providers?
2. A comprehensive list of competencies includes:
   1. A list of behaviorally measurable competencies necessary to fulfilling the position
   2. A prioritized list that separates out key competencies in at least the following areas:

1. i.      Work product – that is, related to the output and outcomes
2. ii.      Work process – that is, the human interaction elements
3. iii.      Relation to organizational philosophy

3. An employment agreement
   1. Two-sided, win-win agreement
   2. Identifies resources needed and who will provide what
   3. Includes measures of effectiveness within the control of the employee

1. i.      Timelines
2. ii.      Milestones

4. Identifies compensation
4. Ongoing, periodic feedback
   1. MBWA, or Management by Walking Around

1. i.      Informal, casual and specific
2. ii.      360 degree where appropriate (that is, from supervisor, team, customers, direct reports and other stakeholders)

2. Positive reinforcement

1. i.      4:1 Rule (Give 4 positive reinforcements to every punishment)
2. ii.      Appropriate focus on behaviors or results (see table, page 3)

3. Discuss corrective actions at least at milestones

1. i.      Includes training & development strategies

5. Performance Appraisals
   1. Should be developmental in nature
   2. Should be comprehensive (360o)

1. i.      Supervisor carries no more weight than work team, customers, etc.
2. ii.      Feedback resources limited to key partners (10-15 sources at most)

3. Should lead to re-contracting, that is, a new employment agreement
4. Should focus on two or three key competencies for development

Finally, here are some Performance Appraisal No-Nos that most experts agree we should avoid. Each is followed by the reasoning and some alternatives to using Appraisals that will get better results.

1. 1.       Using Performance Appraisals as basis for salary increases and bonuses

Concerns: Concern for monetary rewards contaminates the system; people tie the reward to the appraisal, not to the behaviors

Alternatives: Use instead, market rate; accumulation of skills and responsibility; seniority; and prosperity

1. 2.       Using Performance Appraisal as a basis for promotion

Concerns: Good performance in present position is no predictor of good performance in the next position

Alternatives: Special assignments; assessments; group process; flat org chart with opportunities for leadership and influence

1. 3.       Using Performance Appraisal as a basis for dismissal

Concerns: Retroactive reviews, subjective feedback, open to charges of bias (in cases of protected classes)

Alternatives: Ongoing supervision and feedback and documentation consistent with job descriptions, competencies and employment agreement

  Spend time looking at your own performance management system. How can you improve it? Have you stumbled into any of the “no-no” areas?

When to Manage for Behaviors and When to Manage for Results (For more on this subject, read Aubrey Daniels, Performance +)
Manage for Behaviors when…	Manage for Results when…
Current performance is long way from targeted goal (as in novice employees)	Behaviors and Results are highly correlated (for example, number of invoices done/day)
The relevant Behaviors are socially sensitive (for example, bad grooming)	The employees are skilled and know what Behaviors are needed
The Result is long delayed (such as big ticket sales)	The Results are improving
The link between Result and Behavior is not obvious
Results are slow or inconsistent but out of control of the individual

About Purpose info@aboutpurpose.com  ·  612-965-2253   ·   Shoreview, MN, USA