This is the final article in the series on performance appraisals and why they don’t improve poor performance.

We’ve seen that the emotional pain they create impedes organisational productivity, that both the way they’re constructed and used makes them an unreliable and invalid method for evaluating past performance.

It’s been said that that which isn’t measured can not be managed, which is why so many managers believe that job performance must be evaluated.

The sociologist, William Bruce Cameron (not Einstein, as is widely reported) had this to say: “Not everything that can be counted counts, and not everything that counts can be counted”. Performance may count but can’t be counted - at least not to the extent that managers would like. Of course, that hasn’t stopped their use.

And so, in this concluding article, we’re going to look at the ancillary things that performance appraisals are used for. Then we’ll dig deep into why they don’t work for their intended purposes. Finally, we’ll look at a method that is easier, cheaper, and much more effective for correcting poor performance.

 

What are appraisals used for?

Ostensibly, performance appraisals were “designed” to evaluate past performance.

The basic idea was to compare what was done during a certain period of time against some pre-existing standard. In traditional appraisals and multi-rater feedback, that standard was determined by the organisation. In MBO, it was agreed upon by both supervisors and subordinates. In self-appraisals, there probably was no standard, though the more ambitious employees would have set their own.

 

Parts of appraisals

In an earlier article, we considered the famous “sandwich appraisal”.

The meat or the filling of the sandwich was the unpleasant part of the evaluation. This is where employees were told what they did wrong. In a very weak attempt to soften the blow, as it were, something “nice” was said before and after. In other words, the best part of the sandwich was the bread, and that didn’t mean money.

Now what makes the performance review all the more confusing is that some managers also liked to use them as an “opportunity” to identify training and development needs. And just to make sure they didn’t overlook anything, a little discipline was thrown in as well.

 

Does your organisation do this?

Has this approach been effective?

Probably not. Why is that? Well, think about it.

 

To discuss what is good and what is lacking, what should be rewarded and what might be punished altogether is nothing less than pursuing crossed-purposes. Suppose during your appraisal your boss asks you if there’s any training that you think you should get in order to help you in your job. What would you say?

You might say, “Well, actually, there is a course that I’d like to take”.

And then your boss might ask, “Why do you want to take that?”

And then you’d say something like, “It would help me to do X, Y, and Z better”.

What is the underlying problem in this conversation? In so many words, you’re saying that you lack competence in something. And so now your boss might suggest that if you need training in that, then perhaps you’re not quite ready to be promoted. Do you now see why mixing performance evaluations with a discussion about training needs is problematic?

Ever heard the saying, “Once bitten; twice shy”? It means that you’re not going to let yourself get caught out twice.

And so even if you think you could use some training, you’re not going to tell your boss that because it may mean that you get passed over for promotion again, or get a lower rating, for example.

Has this ever happened to you or someone you know?

Have you ever done this with a subordinate?

The truth is that if you wait until the annual appraisal to find out if someone needs additional training, then you’re the one who’s incompetent. This is a discussion that should be ongoing.

Your people should feel that as a part of their personal and professional growth that when they spot an opportunity or a need that they can approach you for your guidance and support.

But under no circumstances should you combine a formal meeting about performance with a discussion about training and development.

 

Why should that matter?

Apart from causing more emotional pain, because bonuses are often tied to the outcome of appraisals, to concede that there might be room for improvement could negatively influence the size of theirs.

 

How do you prevent this from happening?

By becoming intimately familiar with the organisation’s business plan, as well as the knowledge and skills that your people will need to implement it, and then planning the necessary T & D separately from any performance evaluation.

 

Why appraisals don’t correct poor performance

In previous articles, we examined at length why appraisals have failed to correct poor performance.

There is another reason which hasn’t been discussed. It’s that when ratings are given on an appraisal, and especially when they are tied to bonuses, they place a perceived monetary value on employee performance. In fact, people will think of it like that. They will say to themselves, “Is that all you think I’m worth?”

What do you think the result will be? Most people already believe that they work hard and that they’re good at their jobs.

When you give them a low rating, or one that is lower than what they think they deserve - it doesn’t matter what the reason is - in their minds, you’re quantifying what you think they’re worth.

You have to admit that most people, including you, will not come in early, stay late, or work on the weekends so that you’ll get a higher rating on your performance appraisal next year. So, what happens?

Instead of working harder, they lower their performance to the level at which they think that rating deserves. They reason to themselves that they can get whatever rating you gave them for a lot less work. And that’s why appraisals don’t correct poor performance.

And here’s another thing: Except in those circumstances where both the supervisor and the subordinate agree that the performance of the latter has been exemplary, the two parties will see the standard of that performance differently.

That means that you can’t expect the appraisal to improve what you consider to be poor performance. It won’t happen. You see, it goes back to Herzberg’s study in the 1950s.

People expect to receive fair compensation, and that includes bonuses. And when you withhold them, they see you as being unfair. That’s because they believe that they deserve them as much or more than everyone else. So now that you know why performance appraisals don’t correct poor performance, stop using them for that purpose.

You’ll only make matters worse.

 

What is the purpose of performance appraisals?

So now we have to ask ourselves what the purpose is of a performance appraisal.  Why do we use them?

To look at this another way, ask yourself this question: “What outcome do I want as a result of giving a performance appraisal?” Here are some answers.

 

T & D

Some managers use them to identify training and development needs. If this is you then have a separate meeting for that purpose. Only discuss that at that meeting. If you do it that way, then no one will feel threatened, and you’ll have a successful meeting.

If you get pushback from the person to whom you have recommended it, then say that you want that person to have the skills - and spell out what they are - that that training will give him or her. Keep it separate from any assessment of performance.

 

Discipline

If you have a discipline problem, then hold a counselling session. Keep it informal for as long as possible. If, and only if, you need to start some formal procedure regarding punitive action, then you can document it; but don’t use the appraisal to do it.

It’s a mistake to think that you can give praise and either initiate, or pursue, disciplinary matters in the same meeting. You’ll make a mockery out of the former or dilute the intent of the latter.

 

Salary & bonuses

If you want to determine salaries and bonuses, then pay everyone a sum that is commensurate with their responsibilities and level of expertise.

As for bonuses - and this is critical - divide that part of the profit that you’ve set aside for them, or if you’re in the public sector, the pot that you’ve been given for such things and give everyone the same amount.

Now it could be that you’re shocked by such a suggestion; but here’s why. If you refer to your people or any group of them as a team, then you must compensate them as a team. You can’t have it both ways. You can’t expect people to work together as a team but reward them as if they were competing against each other. And competition you will get if you reward them as individuals. So, you have to decide in advance what you want, and then reward people on that basis.

What is an effective substitute for performance appraisals?

 

You may be wondering what an effective substitute might be for a performance appraisal. The answer is to have informal reviews.

Informal reviews are always unofficial. The notes from the meeting are given to the individual; not placed in his / her file.

How often are informal reviews undertaken? Your organisation could decide.

It could be twice or three times per year, or every month for that matter; but here’s the difference: You wouldn’t be involved in any of them unless the person who wanted the feedback asked you to.

Instead, the person who wanted the feedback would be at liberty to ask anyone. You see the goal is improved performance. That’s why you must understand what the purpose is from the outset. If the purpose is to make a record for disciplinary reasons, then you have a disciplinary meeting. That’s the appropriate place for that kind of thing.

But if employees want to improve and they’re not sure how best to go about it, then they might prefer to ask someone who is doing the job they aspire to someday to look at their CV and then give them some honest advice. If you’re not the person who is the best qualified to offer an opinion, then why should you be involved in the discussion?

In a world of work, where no one has a job for life, employees have to create their own personal development plans; and part of doing that is getting feedback from those who have done it already.

 

There’s another part of this that must not be overlooked. It’s that the time to get feedback on any behaviour is at the time that it occurs; not six months or a year down the road. Regular, constructive feedback is the most effective way to correct poor performance. In fact, a little, often, is likely to prevent the need for something drastic later on. Let’s call it what it is.

If you supervise people who are performing badly, then it’s probably your fault.

Why? Because it should never have gotten this far. It has from neglect; your neglect. You haven’t stayed on top of things. You’ve been derelict in your duties. Yes. These are serious allegations.

The thing is that while it’s better to be able to tell people what their responsibilities are and then get out of the way and let them do it, there are times when close supervision is needed. And if you fail to give it when it’s needed, then it’s your fault when the performance of those in your charge declines.

 

Conclusion

Performance appraisals are ineffective for many reasons. In the majority of cases, they are the wrong tool for the job.

By definition, they should only ever be used to give praise; and nowadays that can be done more effectively by simply telling people that they’ve done a good job and, when possible, rewarding them for it.

Training and development needs must be identified in a meeting solely for that purpose.  Doing so will insure candor and remove any threats that such honesty might reveal in a formal performance evaluation. Discipline problems must also be dealt with in a separate meeting that centres around the unacceptable behaviour.

Performance improvement, on the other hand, should be undertaken through regular feedback by you, the supervisor, and through informal performance reviews that the individual arranges. You can see how sensible it is to separate these activities from one another. The problems are caused by trying to do them all at once. Doing so may make sense to you, but to employees, they create all manner of unnecessary conflicts.

Anytime you decide to have a meeting, whether it’s a group or one-on-one, ask yourself what its purpose is; and then schedule the right one. Resist the temptation, however, to combine any of them. Otherwise, you’ll do far more harm than good.

 

 

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