Performance Appraisals - Is the System Irrevocably Broken?

Aubrey Daniels, one of my favorite authors and thought leaders on employee performance, recently wrote an article, Finally! A Real Solution for the Performance Appraisal System.  Daniels predicts by the end of this decade, the performance appraisal system as we know it will no longer exist.  Furthermore he provides this indictment on the whole idea of Performance Appraisals, “In working with hundreds of organizations over the last 40 years, I have never been in one where the performance appraisal system, or should I use the more politically correct performance management system, was not a problem.  Never have I seen one that was used as intended, effective or liked by management and other employees.”

I’ve shared the article with several of my clients, and while agreeing with much of the article, they bristled at the idea that “all is broke!”  Indeed having worked with these clients and been exposed to their performance appraisals I would agree that there is more right than broken with their appraisal system.  However I would also note that these clients have dedicated a lot of hours to making their performance appraisals meaningful and also offer opportunity for the employee to grade themselves. 

One of my clients has taken the advice of Jeff Smart from Topgrading and uses the Job Summary Scorecard for their performance appraisals.  In addition to using the Accountabilities Ratings they score each position’s competencies ratings as well.  These numbers are used for the quarterly performance team assessment each executive leader performs on their individual members.  There are measures for performance and for living the company’s core values.   The beauty of this system is that it provides a more objective measure to an assessment that is largely subjective in nature.  By performing the evaluations quarterly they fit into the habit of evaluating your team’s progress to becoming “A” players. 

Let’s take a look at Aubrey Daniels five points to his solution to Performance Appraisals.  Please read the article to get all the details.  As a comparison I’m offering what my clients do differently on each point:

1. First take all responsibility for the “system” away from HR.  (Gazelles Clients: In every case the system is the responsibility of the manager and was developed by them to appraise performance of their team.)
2. Assign the responsibility of helping a performer improve to a person who works directly with such person, where they can see the person’s behavior in all its accomplishments and failures, unfiltered by paper, rumor and sampling errors.  (Gazelles Clients: With the managers doing the performance appraisal this is always the case with these clients.)
3. Third, change the title of supervisor to Coach. (Gazelles Clients: This is not being done.  Yet I believe the manager in almost every case acts like a coach to his team.  The value of this and the reason to change may make sense when incorporated with step 5 below.)
4. Fourth, hold supervisors accountable for the success of the people they recommend for promotion or reassignment.  (Gazelles Clients: This may be an area for growth and improvement for clients.  While they accept responsibility for recommending their people for promotion and reassignment, the feedback loop for improving their skills in assessing employee’s strengths and weakness would be an excellent step to review when one of their recommendations fails or succeeds.)
5. Fifth, all supervisors will not automatically become coaches. (Gazelles Clients: This step is not be followed by my clients. Being a good coach is a requirement for these leaders and managers, and the assessment tool they use sharpens their ability for behavior analysis.  However none of the businesses reward the coaching designation as a higher pay grade. The data they collect shows performer’s improvement, and that data is shared when conducting performance appraisals.  

If your performance appraisal system is broken, the article by Aubrey Daniels will make you nod in agreement.  The challenge is to build a system that provides the type of feedback to your employees that improves performance.   Following Daniels ideas will help you succeed.  My clients already are achieving this improvement by using a performance appraisal system that follows the intentions Daniels suggests.

Strategic Discipline with its focus on priorities, metrics and meeting rhythms builds a structure that is performance driven.  In weekly meetings each leadership team member is called upon to report on their progress against the priorities and metrics for achievement that has been established in the quarterly and annual meetings.

As a radio station sales manager I conducted weekly meetings to review each salesperson’s revenue goals, what they’d achieved the previous week toward that number, how short or over they were on performance and what they planned to achieve the coming week to meet or continue to exceed their goal.  Is your leadership team conducting similar type meetings with the people who report to them?  Are they making each person on their team accountable to their department goals?  This type of performance appraisal should be a weekly occurrence.  

Furthermore, if your team conducts daily huddles, they provide a daily performance appraisal requiring each participant’s achievement on their daily metric.

One of the best books and quotes on employee performance and appraising comes from Ralph C. Stayer & James Belasco, Flight of the Buffalo, “Do the people in your company know how well they’ve done before they go home every night?  People perform what they measure – help the performers to measure the “right” stuff.”

Ask yourself if this is occurring in your business?  Is it time to improve your execution and performance appraisal process?  Contact us for help, or consider attending our Mastering the Rockefeller Habits Four Decision Workshop in November.