Why are we doing these anyway (performance appraisals)?

We may dread them and we may put them off for as long as we can, but in many organizations, January is performance appraisal time. Weather they are called employee evaluations, employee appraisals or some cryptic acronym, their accuracy and usefulness are often questioned. Given that in many cases they just have to be done (it’s our policy ya know), we best figure out a way to ensure that the time we spend on them is productive. 
The most profound challenge with performance appraisals concerns their usefulness. Every year at this time I hear complaints from managers and employees alike regarding how useless they are given the amount of time spent on them. Like anything we spend time on, we need to feel that time spent is going somewhere. In other words, if I am doing it I need to know why. 
This is precisely the problem. In many organizations, if you ask around, most will not know why they are done, other than because they always have been. And in organizations where being accountable for the time we spend on all work activities is valued, this just does not make sense. 
There are essentially three purposes of performance appraisals: employee development, administrative record keeping, and to determine promotions and salary changes. Now, we certainly need to keep records of performance and we certainly can utilize an assessment of performance for promotion and salary issues. But, when it comes to employee development, many of the forms we use and the way we use them do not serve to improve performance or to develop employees at all. In fact, they can have the opposite effect. This is because the way they are set up makes them nothing more than a judgment of performance, an exercise in evaluation for its own sake, as well as a source of conflict and defensiveness.
In order for any evaluation to be developmental, is has be forward looking, not backward gazing. But most appraisals look at the past and then give a judgment or a score. Most stop there. They usually do not include the essential step of providing direction on how to fix or improve things that did not go well. Nor do they provide goals for someone to reach. 
Telling an employee that they “performed at a poorly or adequately” in specific areas does not improve performance. Instead, it frequently brings about a debate regarding the truth of the assessment. This “search for the truth” occupies the time and energy of both parties and the discussion will not focus on improvement for the future, but instead on who is right, who is wrong, and whose “fault” something in the past was.  Sometimes, when employees are uncomfortable getting into a debate, they keep their disagreement to themselves and become resentful and angry at the inaccuracy and can become disengaged as a result. 
Any effective appraisal process must also include a clear set of goals outlined at the beginning of the year. Without these, employees can find that they are surprised by specific evaluations. For example, a “poor” rating on teamwork, based on feedback the boss received 6 months ago, leaves the employee wondering why this was not brought up when the situation occurred. It also leaves them wondering what on earth can do about this now that 6 months has passed. They feel set up for a “poor” rating. They may also not know what really counts in terms of their performance until they are rated on that aspect of performance. This approach is not developmental, but purely evaluative and punitive.    
Probably the best approach to managing these challenges is to develop a process which aims to manage performance and development employees through the setting of goals and objectives at the beginning of the year, and then to look at the extent to which these goals were met at the end of the year.  At the front end, goals can be spelled out in terms of defined, measurable actions with time lines. At the back end, we can see if the goals were met and if the defined actions were done. If not, additional goals and actions can be proposed, becoming some of the goals for the next year. 
A simple model like this one can help to create performance appraisals which actually do something, not just ones that say something.  

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