Home > Risk > Why I hate – and love – performance appraisals

Why I hate – and love – performance appraisals

December 17, 2012 Leave a comment Go to comments

This is not about loving to receive feedback where I am highly rated and hating it when I am not.

It is about loving performance appraisals that contribute to my and/or my team’s success, and hating those that leave me (or my team) demoralized and depressed. I have received both, and like to think that those I have given fall more frequently into the positive category.

I wrote about this issue earlier this year, but the time is near when performance needs to be assessed – and my assessment is that pretty much everybody gets this wrong. Please review that earlier post and all the examples I described of good and bad appraisal sessions.

I am in the process of reading a new book, The Trust Edge, by David Horsager. I will write and post a review later, but it makes a few points worth quoting:

  • “Employees don’t leave companies, they leave managers and supervisors. People leave because they are not respected, listened to, appreciated, or cared about.”
    • Ndm: The appraisal process is an opportunity to listen, have an honest discussion, and demonstrate that you care for the success of the employee
    • Ndm: In the earlier post, I provided an example where my manager allocated 15 minutes per employee for performance discussions. What do you think of that? I also provided an example where the manager spent 15 minutes telling me why my self-assessment was too low. How do you think that worked?
  • “Only 50% of American workers believe that management is at all concerned with the well-being of their employees. 82% think that senior leadership are helping themselves at the company’s expense.”
    • Ndm: Employees should leave their performance review meeting energized and motivated. If they are surprised and demotivated, the manager (and probably the HR function) has failed
    • Ndm: How many of your employees would follow if you took a new position?
  • “You are trusted to the degree that people believe in your ability, your consistency, your integrity, and your commitment to deliver.”
    • Ndm: Do not underestimate the reality that how the manager performs in the assessment process has a massive impact on trust and respect from employee to manager
  • “Do not underestimate the bottom-line impact of compassion. The ability to show care, empathy, and compassion is a strong component of trust.”
    • Ndm: Don’t fake compassion. Be honest and candid, but share bad news carefully – not to cast blame but with a view to helping the employee through and past the situation

I want to close with one of the most frequent causes of disaster: the HR function mandating that employees are graded on a curve. In other words, only (say) 5% can get the top rating, and at least 5% must be rated below the ‘average’ rating.

This is nonsense and if I were CEO I would fire any HR manager that tried to foist it on me!

  1. If the majority, hopefully a sizeable majority, of your team are not high performers you are probably doing something wrong! OK, there will be exceptions for organizations where “good enough” is good enough. But I hope few people are willing to accept a mediocre or “average” team
  2. When everybody is putting their heart into their work and demonstrating success by any measure, it is demotivating to get a rating that is not consistent with performance
  3. If you have employees that are not performing to your expectations, why are they still with you? They should already be on a performance plan– or out of the company. So, the number of people at this level should be minimal, if not zero

I welcome your views, and please share your experiences.

  1. Richard Archer
    December 17, 2012 at 7:35 PM

    Norman – I missed your earlier posting about performance appraisals. Thanks for providing the link so that I could correct that oversight.

    I am in total agreement with everything you’ve written. In going back to the earlier posting, your examples brought back memories of many of the bad and very few of the good performance appraisals. My prayer is that I have learned from the bad about the things not to do to people who work for me and have used the good to encourage myself to better performance.

    I’ve had quite a few encounters with the mandated “grading on the curve” and forced rating of a certain percentage of any group in the bottom 5% or 10%. Some people doing appraisals use the method even if not required. They’ve read about the Jack Welch-GE 20-70-10 vitality model and the performance it is credited with driving and embrace the concept totally, ignoring that in any large group, there may be a smaller group that is composed predominantly of top 20 percenters or bottom 10 percenters. The result – All managers are forced to designate 10% of their team members as being low performers without regard to their actual contribution to the success of the organization. The justification for it that has been given to me is that it offsets the tendency for ranking creep where managers give everyone average to above average ratings because they don’t like to do performance appraisals and don’t want to give their subordinates bad news. In my mind, that kind of manager should be in the bottom 10%. Unfortunately, in my experience the proportion of that type of manager is much, much larger.

    The reality is that if a subordinate has to wait until the annual performance appraisal to know who well or how poorly he/she is doing, then the manager isn’t doing the job properly. Performance is improved by continuous feedback, not widely spaced sessions that are conducted only because you need justification for salary modifications. As you’ve indicated, the annual performance appraisal should be a time when the manager and subordinate can exchange information on what has happened throughout the year, recap outcomes, and layout a plan for improvement in the future.

  2. December 17, 2012 at 11:47 PM

    Norman – I like the quotes and appreciate the insights you provide with them. I also hope you rotate as CEO through one company per month in 2013. When you do, we’ll take you up on your pledge to fire HR staff who require grading on the curve.
    It gets ever worse when each department grades on the curve.
    Brilliant Manager A (BMA) has had ongoing performance coaching discussions throughout the year, and who have motivated and energized their staff are forced to identify a goat. Lousy Manager B (LMB) in another department who has one cursory 15-minute discussion per year (and management skills in the 12 months in between to match) also develops a curve. BMA’s least brilliant performer is put on a “plan”, and sets sights elsewhere. Other companies would kill for this talent – but they don’t have to; this person is ready! Meanwhile, LMB’s highest “performer” is moderate at best, but is celebrated with raises and promotions.

  3. Henner
    December 18, 2012 at 9:23 AM

    Norman, great blog and helpful quotes from the book. I am a strong believer that the success of a company is based on the capabilities of managers to do their job: motivate employees to do their job properly. I also am a strong believer that there are not too many managers doing this. One of the reasons is that they do not have the needed analytical capabilities, be it because of a lack of intellect or be it that they are not provided with the right tools. Analytics help individualizing an employee. Analytics help setting the right context to that individual: completing the employee profile, helping the manager better understand the individual in order to find the right role that has highest chances to make the individual happy, high performing and engaged.

    http://www.the-decisionfactor.com/analytic-applications/an-employee-isnt-a-number-but-a-lot-of-numbers/

  4. March 6, 2013 at 8:00 AM

    Argh, the dreaded ‘fit to this bell curve’ part of the performance management process! It’s a terrible, terrible practice. I’ve heard all the arguments as to why a company wants to do this, but none of them have ever made sense to me or to my peers. Senior management need to stamp the practice out, should they ever encounter it.

  1. January 5, 2013 at 7:34 PM

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