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Everybody, it seems, hates performance appraisals: managers, employees, even human resource professionals. It's amazing that such dinosaurs (the appraisal systems, not the people) are still around. They must be, however, since a book has recently been published called Abolishing Performance Appraisals. Yet despite the outcry against appraisals, there's nothing wrong with them that can't be fixed by getting managers out of the picture.
Critics argue that performance appraisals not only don't accomplish what they're supposed to-that is, improve performance-they have unintended negative consequences. In many cases, unfortunately, that's true. But it doesn't have to be that way. Performance appraisal can be extremely valuable, reinforcing accountability as well as short-circuiting problems. What companies need to abolish is not performance appraisal itself, but the idea that it's a management tool. In fact, I'd go so far as to say that the basic problem facing PA can be summed up in one word: manager.
As companies scramble to dismantle their cumbersome hierarchies and do more with fewer people, they have to make the best use of the creativity and leadership capabilities of all employees. Leaders today are more important than managers, and partnership is more effective than command-and-control. The idea of judging employees and telling them they need to do this or that to improve-or else-doesn't make sense.
The good news is that companies can avoid this parent-child dynamic. The people who should be in charge of performance appraisal are not the managers but the workers themselves.
A number of companies have figured this out. For example, a utility firm called for volunteers to help design a new performance system, and dozens of people from various functions stepped forward. Supervisors and employees learned to be interdependent partners and to focus on what the company needed for the future rather than on past problems.
In the new system, they start with two questions to clarify their aims: "Who are we here to serve?" and "What will it look like when we get there?" Once objectives are agreed on, each employee can suggest the best people to assess how well he or she is doing in accomplishing these objectives. Sources may include peers, customers, managers, suppliers, or colleagues. Employee and supervisor decide who will interview whom, and when the two meet later to compare notes, they focus on opportunities, not judgment. Not surprisingly, this process is energizing rather than painful. Many innovative improvements have resulted from these sessions.
Here are some principles that can guide performance appraisals out of the dark ages into an era of collaboration and innovation:
Partnership trumps paternalism. If bureaucracy is to be abolished in favor of networks, team effort, and individual accountability, employees have to assume responsibility for measuring performance against the standard of excellence. Learning to do this is part of their development as leaders and contributors. They must take the initiative, soliciting input from their supervisors and others and finding opportunities to learn more. Since people don't learn well in an atmosphere permeated with judgment, the focus needs to be on shared discovery. Collaboration is better than praise, which establishes the fact that one person is in a position to judge.
Performance assessment should not be considered a management skill. In fact, supervisors may have very limited or biased views of a person's performance. Managers are inefficient detectives and are often too late to catch faults. Also, partly because of corporate politics, they have a natural tendency to hedge bets, hide problems, and create empires. A more accurate and comprehensive picture results if employee and supervisor seek feedback from a variety of sources. They should do this on a continuous basis, not just for formal performance reviews. Performance management should support the organization's business goals, not those of the manager.
If managers have a problem giving up control for shared ownership because they feel they'd be abdicating their responsibilities, they may need some convincing. Sharing authority is not like handing over a piece of cake, wherein you lose what you gave away.
Teams, and individuals within teams, need to set objectives together and obtain feedback from each other. Teamwork means sharing and pulling together toward mutual goals. A hospital in North Dakota revised its appraisal system, in which the appraisal standards were different for managerial and non-managerial staff. It developed a single format based on the assumption that everyone contributes equally to the quality of patient care. The new format includes both individual and team objectives.
Ratings and numerical grades for performance are antithetical to partnership. Not only are they arbitrary, they involve a lot of post-event analysis, supporting the wheel-spinning about past mistakes rather than zeroing in on opportunities for future success. Moreover, they perpetuate that outdated controlling-parent mentality.
When done the old traditional way, performance appraisal can indeed be a waste of time for managers, employees, and human resource people. Worse, it can create dysfunctional families of workers who should be playing on the same team rather than against each other. But appraisal systems that focus on the "we tomorrow" rather than the "you yesterday" have tremendous potential for improving team, individual, and organizational performance. Invaluable information is gleaned and shared, and ideas flow from openness.
If organizations really do want to enhance performance, they can't turn their backs on appraisal, since measurement is essential to improvement. But they can simplify the process by throwing out 80 percent of their bureaucratic systems and shifting responsibility to the employees. High performers, now in short supply nationwide, would be more attracted to the enterprise and more eager to contribute.
Even the managers would be happier. They'd be able to increase the efficiency of their enterprise and challenge their employees with less effort, and they might actually have more fun.