"The traditional approach to performance appraisals is disliked by all participants, ... and does nothing to promote individuals’ best performance."

By R. Bruce Wright, CPCU

Recently I was invited by a Statewide Human Resources Association meeting to talk about Performance Evaluations (PEs) with them. As many of you already know, at Synebar Solutions we think that good safety practices and good management techniques are two sides of the same coin, so I readily accepted. Then, once I was committed, I began to think about how to approach the topic. (There’s nothing like having an audience lined up to focus one’s attention on a topic!)

I started by looking at the traditional approach to annual reviews, or performance evaluations. My basic questions were:

1. What do people believe is the purpose of an annual review?
2. What do they actually get out of them?
3. What do the HR folks think about the process?

That first question is one I often ask managers when the PE topic comes up. I always get answers like “to provide employees with feedback on their performance, to identify training needs, to justify salary increases, promotions, disciplinary acts, or terminations, to identify developmental needs, and to meet federal requirements.” Hmm, I don’t agree, but we’ll come back to that later.

As for the second question, when I ask people about how smoothly their PE process actually works, what I usually hear is that nobody likes the results! The supervisors feel uncomfortable being asked to evaluate workers, don’t like being put in the role of judge & jury, and so they drag their feet when it comes to performing evaluations. The employees don’t like being criticized or having their weaknesses pointed out, even when these are described as “developmental needs” or some other flowery euphemism. The meetings are uncomfortable for both sides. Even though annual raises are often tied to PEs, managers avoid doing them as long as possible. As a result, most evaluations are done late, or done hurriedly to meet a deadline, which leads employees to conclude that their managers don’t even care enough about them to do the paperwork required to get their raises put through the system.

HR people answer the last question by telling me that they don’t get to add much value. Instead, their primary duties are to devise the form used for the PE, to keep personnel files orderly, to notify supervisors of due dates for PEs, and mostly to constantly nag everyone involved as the PEs become further and further past due. They hate the process! This is not unique to our customers. In fact, the situation is so bad in companies generally that in survey after survey managers consistently name performance appraisals second only to firing an employee as the task they dislike the most. So, let’s look at why this might be.

There are several traditional PE systems used to rate employees, but they all fail to reliably assess employees or to help motivate and develop them. Once upon a time, annual evaluations relied primarily on “trait-based” measurements. Supervisors were asked to rate employees on their “integrity,” “energy,” “enthusiasm,” “attitude,” “conscientiousness,” or ability to be a “team player.” Perhaps you remember such phrases from the past, but I hope your company doesn’t use this approach today. Trait-based evaluations should be confined to the trash heap for several good reasons. They are by definition based on personality traits, and while employees can change specific behaviors, they cannot change their personalities. The descriptors used are vague and unreliable, and may reflect little more than how well the supervisor likes a worker. The approach offers little insight into employees' true performance since supervisors can record their opinions based on who they feel should get a raise, rather than on specific behaviors. Obviously, this approach also leaves a company more vulnerable to discrimination claims, because supervisors’ biases can influence these undocumented assertions.

But aren’t more modern approaches objective? Commonly used PE systems today often use numerical rating systems where managers score an individual numerically- i.e. “1 for Excellent, 2 for Very Good, 3 for Acceptable,” etc. Other systems use descriptive ratings- “meets, exceeds, needs improvement,” to classify employees. On the surface, this seems like an objective approach to assessing strengths and weaknesses, but a closer look reveals that despite appearing less subjective, they fail to provide reliable ratings, or to help motivate and develop employees.

Obviously, if supervisors have to rate employees against each other, the result is to pit the employees against each other. Such a design encourages workers to battle with their co-workers rather than support them. And, if ratings are compared to so called “objective standards,” supervisors are tempted to succumb to grade inflation, ending up with a staff reminiscent of Lake Woebegone, where everyone is above-average. When salary increases are tied to a PE rating, managers know they are limiting their employees’ raises by giving any rating less than “outstanding,” so, in some organizations, nearly everyone gets the top rating!

MBOs, or “management by objectives” is another common approach, with specific goals determined jointly by a supervisor and an employee at the start of the period, with performance determined by the accomplishment (or not) of those “objectives.” While this is a better system, it is still has subjective elements and while it may work as a way to “manage the managers,” it may be difficult and time-consuming to adapt for field workers.

The “once a year” nature of traditional systems also makes them less than effective. Supervisors fill forms with opinions of the performance of employees, opinions that reflect only what they can remember, usually the most recent events. Diligent supervisors may use little “reminder” notes they jotted down during the year, but all too often such notes are picky and negative. Feeling uncomfortable in the pressurized atmosphere of the situation, supervisors are often unskillful and awkward in providing feedback in the annual reviews, provoking defensive responses from employees, who may justifiably feel under attack. The employees come in to their annual reviews hoping for the best and fearing the worst. Those who receive ratings that are less than the best, or less than the level of their own view of their performance, end up thinking the supervisor is punitive and unfair. It’s all very stressful and uncomfortable for both sides. As a result, supervisors tend to avoid giving honest critical feedback, which short-circuits the developmental process.

So far we have said that the traditional approach to performance appraisals is disliked by all participants, fails to provide objective ratings, damages trust, undermines teamwork, misses development opportunities, and does nothing to promote individuals’ best performance. And, it reduces HR staffers to file clerks and naggers. It sounds like I am against Performance Evaluations entirely. And I am, if they are based on the traditional systems described above. But, there is a better way!

The good news is that what follows is an effective, comfortable, easy to understand program to manage employees’ performance, promoting good efforts and correcting efforts that fall short. The bad news is that it requires the commitment of top management, needs constant effort, and depends on the good will of good people. But that describes you and your fellow workers, doesn’t it? 

Here are the seven basic elements of a better performance management system.

1. Develop clear job descriptions. Clear and detailed job descriptions are key to the entire process. It’s the first step in choosing who to hire! If you can’t define the job, how can you ever expect someone else to do it right?
2. Select the best people using Behavior-Based Interviewing. BBI, a selection system that uses past performance to predict future performance, is the best way to select people for openings. (For a more complete description of BBI click here.) What behaviors are you looking for? The ones you described in the job description!
3. Provide effective orientation, training and on-going education to all newly hired AND to all newly promoted workers. Because, before people can do any job, they need instruction, they need the information necessary to perform well. This includes job-related, position-related, and company-related information. In a nutshell, teach them what a good job is and give them the tools they need to do it. If you can’t describe what you want, how can you expect anyone to give it to you?
4. Provide on-going coaching and feedback. People need ongoing, consistent feedback, both praise and correction. How often? Every day!The best feedback focuses on helping people build on their strengths. Feedback is a two-way process that encourages the employee to seek help. Make people feel comfortable asking, "How am I doing?"
5. Use one-on-one sessions focused on performance development. Every supervisor should meet regularly with every direct report in scheduled meetings, done quarterly or even monthly. The supervisor should first listen as the employee describes how things are going, what's going well, where help could be offered, and then offer feedback. Meetings like this provide a comfortable, non-threatening forum for comparing notes, to ensure that employees always know how they are performing and to review goals and challenges.
6. Offer development opportunities to all employees. Things like advanced classes, challenging job assignments, increased responsibilities , and cross-training all contribute to the development of a more effective employee. Education always benefits the employer, as does the effort to develop a supportive workplace in which people feel comfortable to experiment and learn from mistakes.
7. Conduct exit interviews. When a valued employee (You only hire good people, right?) leaves, you need to know why! Learn from these and use their feedback to improve. Eventually, if you succeed in developing an open atmosphere that supports employees and welcomes feedback, you will reach the point where you learn nothing new in an exit interview. That’s the goal!

Do you remember that near the beginning of this article I said I would come back to the question of the purpose of an annual review? Well, if you decided to give this 7 step performance management approach a try, you will find that there is really only one reason to have any form of “annual appraisal,” which is to document your opinion of each of your direct reports so that if you get hit by a bus, the person who replaces you will know how you felt about each of them! That’s it, nothing more.

To sum up, getting the best from your people needn’t be painful. Here are the primary lessons:

• Performance reviews should just document what is already known. “No surprises” is the right outcome for a review. Any other result means the supervisor has failed already.
• Effective feedback should be constant and mostly positive. Praise, reinforce, compliment, coach, and, oh, yeah, correct. And do it constantly, not just once in a while!
• Your forms should “corral,” not drive the process. Do you really need a form? Aren’t your managers smart enough to follow the rules once you explain them? Okay, so you are going to use a form. Just be sure you don’t let “filling in the form” form substitute for the review. Use it instead to guide managers away from trouble, away from legal pitfalls. To stay legal all you really need to do is require that performance appraisals be job-related and valid, apply equally for all employees, are not biased against any race, color, sex, religion, or nationality, and are done by people who have adequate knowledge of the person and job, i.e. by the direct supervisor. So, if the supervisor focuses only on job related performance, you should have nothing to worry about!
• Frequent one-on-one meetings offer low key opportunities to stay on track and reduce the pressure of an annual review, promote communication, make the process both more comfortable and more effective, and help people develop their skills to their maximum potential.
• Employee development is primarily the supervisor’s job, so give your supervisors feedback on it! If you want you supervisors to develop their workers, then measure them on how well they do and give them feedback on how they are performing in that skill as part of their one-on-one sessions.

For more ideas on this topic click you may want to read an earlier article in the Archive, written by our founder, Dean Wisecarver, and published in the Jul-Aug-Sep, 2004 issue of this newsletter.