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Performance Failure or Performance Appraisal Failure – Part II

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Image credit: <a href=''>iqoncept / 123RF Stock Photo</a>Continuing the narrative in the same methodology as used in Performance Failure or Performance Appraisal Failure – Part I, namely that “…the result of research into recent data, blog comments and personal interviews and observations show a process that is crying out for change. One ground rule that is self imposed in writing this series is that each problem area must be connected to a proposal to counter that problem.” The five core issues addressed earlier are: having reviews scheduled annually, broad unmeasurable objectives, lack of timing flexibility, subjective evaluations, and tying pay raises to performance reviews. Other system enhancements have added their own degree of difficulty in fixing what is wrong. The following is a logical extension of the first five points.

Part II – Variations on the Basics

6. Self assessment contributes very little to the process. This is an experiment that usually fails. It is like asking a candidate for employment to describe their weaknesses, which of course turns into a list of strengths. While each person must understand their part in an overall mission of the company, most self evaluation will be an inflated assessment of capabilities. Rather than creating some sort of baseline for discussion, it can become a point of contention in the discussion with management. Psychologically, the unknown factor of how co-workers complete their self assessments adds a competitive element that adds to the inflation. Statistics show that most people will not consider themselves to be average and resent being told that they are. Proposed: Input from the employee is critical to the discussion, but informal scripts where both parties enter the dialog with key points to discuss can result in a better chance of agreement. Disagreements will still happen, but focusing on the script for the next conversation can keep it on track.
7. 180°or 360° or 3D evaluation schemes usually fail. In a perfect culture of inclusiveness, honest feedback to management happens without arbitrarily forcing periodic feedback. In a not-so-perfect environment, problems of trust are everywhere. For the same reason that self assessments may be misrepresented to project an inflated version of accomplishments, even blind assessments of managers comes with some risk of retaliation if justifiable criticism is submitted. Human nature kicks in again. Since nobody is average, anything less than above average creates paranoia and anything below average makes matters worse. Proposed: Train managers on creating a positive culture of inclusiveness without relinquishing management authority. This process must encourage honest two-way communication between manager and employee.
8. Inflated performance management systems self destruct. Trending toward the midpoint works only when the system is attached to a salary range and a market midpoint is artificially inserted into the plan. Any performance-only system that assumes a constant progressive improvement of performance on a standard scale is doomed to fail. It is mathematically impossible to continue to differentiate between performers and provide incentives for marked improvement if the ultimate target is for everyone to be at the top end of the scale. Worse yet, if there is no discrimination between players, there is room for contested dismissals when someone is terminated for performance issues. A common theme is a cry of surprise, or even a discrimination claim, when performance is reported as excellent followed by being released for failure. Proposed: Provide training to management and employees that defines performance standards and implement a system that prevents surprise endings. Critically monitor reviews that show a dramatic shift in performance and engage in discussions to resolve issues.
9. Forcing ratings into a predetermined distribution defeats the purpose of assessment. In short, when evaluating performance, it is what it is. The downside of connecting pay to performance has already been discussed, so disconnecting these two factors makes it easier to render an honest evaluation without regard to budget guesses. Keeping in mind that the objective is usually to hire the best into a company, the best of the best will continue to perform and rise to the top. No less should be expected from anyone and there should never be a situation that forces someone to be evaluated below the “mark” on productivity because of statistics rather than performance. In reality the biggest flaw in forced ratings is that it results in comparing employees to each other rather than to a performance standard. Proposed: Use statistical methods after the ratings are given to show the distribution of honestly evaluated performance and create the company normal curve from that. It would seem to be a CEO’s dream for everyone to gravitate toward the high side, but the scale has to be used to measure progress toward achieving the company mission.
10. Software surrogacy is not performance management. Technology can be a useful component into improving performance management. By reducing the amount of administrivia forced on managers and system monitors leaves more time for actual person-to-person communication. If the electronic system adopted is merely an automation of a system that already had built-in flaws it will not improve the process because it adds nothing new. Rushing into adopting technology because a database and glitzy forms will only work if the data can be analyzed correctly and forms do not become a self-fulfilling end. Accuracy in filling out forms does not imply accuracy in performance assessment. Proposed: Adopt only scalable assessment packages tailored to the specific environment to be measured. Avoid off-the-shelf software with one-size-fits all claims.
11. The concept of calibration of employees is offensive and impersonal. Machines must be calibrated to standards of productivity, but the human-machines sometimes bring their own yardstick and even push the established boundaries. Assuming that we have already discarded the broken concepts of tying pay to performance and forcing a normal distribution, the relativity of an employee to co-workers may be of interest because of the need to recognize unique skills and talents and assign meaningful goals. Artificially creating an environment where employees must be cast into a mold for the sole purpose of complying with a company standard defies logic, prevents diversity of thought and creates a culture of clones. An environment of inclusiveness and respect demands that we do better than that. Proposed: Periodic calibration of the system, not people, to conform to the value-added by employees should be used to insure equitable assessments and that there is no forced compromise or restraints placed on individual initiative or innovation.
12. Performance management is not owned by HR. My final point is where I get excommunicated from the HR community… heresy! The management of performance is a function of management and is owned by the company leadership, not any staff function. HR professionals must exercise their responsibility as custodians of the processes that manage the human resource to advise company leaders on matters related to evaluating the workforce to reach company objectives. Again, using the analogy of a Finance function performing the same activities for financial resources illustrates this point. Just as the functional head of Finance will recommend which accounting systems will be used, the HR function must recommend actions to implement systems and establish processes to monitor the progress of worker performance. This requires top-down buy-in and top-down driving forces. Without using our expertise to influence this direction it would probably not happen, but when we begin to assume that it is ours to manage we begin to reinforce that it is another necessary evil shoved down management’s throat by HR. To have teeth, the system must be driven from the CEO with clout and not with thinly veiled HR-speak. Proposed: Human Resources professionals must become both advisors to upper management and employee advocates. Walking this tightrope (without a net?) makes us vulnerable to criticism by both sides, but the true HR advocates of fair, cost effective and productive results from the workforce makes this function a vital part of the overall culture.

One remaining chapter needs to be written before concluding this analysis. Defining the problems and looking at some key proposals is only complete after there is a call to action. In Part III the discussion turns to common sense ways to fix the problems with existing performance systems.

Next: Performance Failure or Performance Appraisal Failure – Part III


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