27 Nov 2006  What Do YOU Think?

What’s to Be Done About Performance Reviews?

What can we do to make performance reviews more productive and less distasteful? Should their objectives be scaled back to just one or two? Should they be disengaged from the determination of compensation and, if so, how?

 

Summing Up

The topic of performance reviews triggers a wide range of complex responses. The fact that most of their strongest critics elected to reply anonymously to this month's column suggests that there are also political overtones to the subject. This month's debate was much like a case discussion, one that is often hard to summarize. But in an attempt to do it, here is my "take" on what you have said collectively.

Everyone sensed the imperfections in performance reviews and the difficulty of discussing them without knowing the objectives they seek to meet. In Bob Handwerk's words, "The 'pain'… of conducting performance reviews is associated with … a lack of clear mutual (management and employee) understanding of their purpose." At the heart of this concern was whether they are intended primarily to benefit the organization or the individual. Jon Clemens, for example, argued that the "purpose of reviews should be to drive better business results for the organization … making sure that the daily efforts of employees directly contribute to both their team's goals and the goals of the organization." In contrast, Deepak Alse commented, "Performance is the other side of personal development." Abbey Mutumba said, "It is better to refer to performance appraisal/reviews as 'personal development reviews' to make the process (fit) more strategically … with overall organizational performance goals and objectives."

There were many suggestions for how to improve them. Typical of these were Thad Juszczak's recommendation that "The process of performance feedback should be continuous." Continuous feedback is an antidote to Hany Derias' concern that "the one thing that performance evaluations should not be is a 'surprise.'" Terry Ott suggested, "performance reviews should be but one part of a continuous loop of planning, coaching, providing spontaneous feedback …." "Much of the problem," according to Rowland Freeman, "is the lack of training for reviewers. They are more concerned with the interview than the interviewee." According to Wally Bock, "When I conducted research … I found that … the more effective supervisors spent the bulk of their performance evaluation meeting time talking about the future."

Forced ranking as one technique for quantifying performance appraisal received mixed reviews. Tery Tennant's opinion is that "forced ranking is injecting fear into the workplace." But as Nauman Faridi put it, "Ranking … must be handled delicately …. Organizations must first improve their performance culture or else they will only make their system worse."

Dean Turner expressed the frustrations of many when he said, "What's the best system? After 40+ years in the work force, I am still searching for it." By way of contrast, Richard Tiedeman commented, "Almost any system would work if organizations truly fostered an environment of continuous feedback." What do you think?

Original Article

It's the season for many employee performance reviews. Why do they seem to rank alongside root canal dental work on our list of things we look forward to as managers and employees? And what are we doing about it?

If we assume that the basic purpose of employee evaluations is to build better-performing organizations, then this has to be one of the most important things we do as managers. But if formal evaluations weren't required, would we even provide them?

Much of this season's debate has centered around whether a forced ranking system works in such efforts. It was given visibility by its adoption at GE several years ago, where managers were forced to identify their direct reports in three categories on a "vitality curve": the top 20 percent, the "vital" 70 percent, and the bottom 10 percent. (Perhaps not entirely coincidentally, these are the de facto percentages used in the forced ranking system for students in required courses at this institution.) Although the system has been modified somewhat in its application, it still triggers advice to those being ranked, especially those in the bottom category who may be given help or advised to leave the organization.

Proponents of forced ranking claim that it is more humane and effective than most qualitative systems for employee appraisal in which employees don't receive frank appraisals because managers are not able or willing to give them. This helps avert surprises, or worse, lawsuits, when poorly-performing employees are fired. Opponents claim that it hurts such things as teamwork and innovation. What little research there is on forced ranking systems suggests that they produce a short-term improvement in performance that soon levels out, perhaps because the worst performers are weeded out in a timely fashion.

Perhaps a more important issue is the objective of the review itself. Is it to weed out poor performers? To recognize the so-called A players? To provide the basis for compensation decisions? To provide clues to future opportunity within the organization? To map out an individual plan for personal development? All of these? Too often this is unclear. Is it any wonder then that managers, many of whom receive little or no training in how to do it, conduct the task of reviewing performance so poorly?

The questions all of this brings to mind include: What can we do to make performance reviews more productive and less distasteful? Should their objectives be scaled back to just one or two? Should they be disengaged from the determination of compensation and, if so, how? As managers, should we invest time to keep a day-to-day scorecard on individual qualitative and quantitative performance and feed back impressions to employees on an ongoing basis? Should periodic performance reviews be relatively incidental as opposed to regular coaching "in the moment"? (After all, aren't we all teachers?) Should less emphasis be placed on looking backward and more on how to improve future performance? Should the process be renamed and redesigned as a "personal development review"? Should we put aside "forced ratings"? Just where does the process fit in building organizational performance? What do you think?

Comments

    • Anonymous

    My personal observations as an employee for a large semi-conductor manufacturer that utilizes forced ranking is that it should only be used for short-term "fat trimming" for the general population.

    The standard line of upper managment is that this continuous raising of the bar fosters innovation and maximum performance. This may have been true in the past when we were a leaner organization, but as we hit maturity with >100k employees globally, the cracks are beginning to show. Forced ranking fosters a culture in which the principles of quality and discipline have now taken a backseat to results. Questionable ethical decisions from the ubiquitous "backstabbings" and even more serious "massaging of the numbers" have escalated. The current trend (hopefully it's just a trend) of shareholder appeasement over other stakeholders further exacerbates this quest to "just get it done."

    Forgive the analogy: I'm not one of those types that thinks every kid in the science fair should get a ribbon for participating. The standouts should be rewarded. Those who didn't place simply don't get a ribbon, but they shouldn't be penalized either. The latter is what occurs in our implementation of forced ranking.

     
     
     
    • Darrel Niemann
    • Director of Technical Operations, smartconnect.net

    I view the performance review as very important, and not distasteful. It benefits both "sides." The company can ensure that they are getting what they have paid for in labor, skill, or talent, and the employee gets an insight on how their work is perceived by management over a period of time. Of course, the most important part here is to maximize the opportunity and open up a communication channel with the employee: be fair and concise, discuss what was done well, what must be improved, and outline clear, attainable, and measurable goals for the coming period. Then, there will be no surprises for either side. Is it a lot of work? Yes. Is it the right thing to do? Absolutely.

     
     
     
    • Jon Clemens
    • CEO, Jakoba Software

    I believe that you hit on the primary question: What is the purpose of the review process itself? In my opinion, the purpose of reviews should be to drive better business results for the organization. To this end, certainly employees need to know how they can develop to be better contributors and to make sure the things they work on matter for the company. However, more important is making sure that the daily efforts of employees directly contribute to both their team's goals and the goals of the organization. Additionally, the tracking of skills and competencies (for the purposes of making better staffing, recruiting, and training decisions) and the insight into these things for managers and HR teams is also vital. Lastly, the performance review process should also provide a way that is much more frequent that once per year for the employee and the manager to enhance communication so that the employee's efforts are optimized toward achieving larger business goals.

    In my experience, the nature of reviews at most companies is overly burdened with administrative headaches involved with passing documents back and forth, knowing when things are due, and getting access to timely, relevant information. This in large part contributes to the standard practice of pain that is associated with many company's reviews. [I should note my bias here as the founder of a company that sells performance management software.] If companies can help all managers and employees alleviate the adminstrative overhead associated with reviews, then it becomes vastly easier for companies to achieve the goals I outlined above while also making it "less distateful" to complete the process.

    With the types of changes I outlined above, companies have the ability to address the tactics that best work for them (i.e. forced rankings, scorecarding, pay-for-performance). The key here is that not every company is the same, and what works well in one company and industry may not be relevant for others. But the universal notion of transforming the review process into a true tool to drive better business is something that is relevant for all companies.

     
     
     
    • Gautam
    • Director, The Imagence Partners imagence.googlepages.com

    The success of forced ranking lies in good goal planning. In fact, for any appraisal system the input (goals) have to be good. Otherwise what comes out (results) is useless and gives rise to heartburn!

     
     
     
    • Nauman Faridi
    • Project Manager, Ultimus Inc.

    History is a good indicator of the future. Performance reviews tell us the history and help us determine what will happen in the future. If we don't like the prediction then we must change it through the action plan, something that should always be part of a review.

    Ranking, on the other hand, is dangerous and must be handled delicately. It is directly attached to the performance culture in the concerned organization. Jack Welch himself says that he "wouldn't want to inject a vitality curve cold-turkey into an organization without a performance culture already in place." So if GE was a success at all, it was because of their mature performance culture. Organizations that simply copy the vitality curve -- or a variation of it -- from GE must first improve their performance culture or else they will only make their system worst.

     
     
     
    • Bob Handwerk
    • President, RLH & Associates, LLC.

    The "pain" or downright avoidance of conducting performance reviews is associated with, as you imply, a lack of clear mutual (management and employee) understanding of their purpose. A performance review is a continuous, results oriented, collaborative process, which relates to the vision of the firm. The need for sophisticated forms is superseded by the presence of genuine, trusting communications.

     
     
     
    • Thad Juszczak
    • Former Federal Manager

    The process of performance feedback should be continuous. Managers inform employees about how they have been doing (from management's point of view) and employees inform managers about constraints they have encountered on achieving performance results. This should not be very formal, but it needs to be precise.

    Too often I have seen managers tell employees "good job!" and the employees have interpreted that as "outstanding performance!" Managers should not be waiting for the once or twice a year period when feedback and performance results are formally recognized. If either the managers or employees are "surprised" during the formal review process, then someone was not doing their job or listening.

    Also, managers have to be constructively critical. My favorite example is the Little Leaguer's parent whose child hits three home runs and strikes out. Yes, praise the child for the three home runs. But, a lot could be gained from comparing the home run at-bats with the strike out. What was different? How could the child improve? In business or government, following three good reports with one bad one will not be indicative of good performance.

     
     
     
    • Saraswathi Sirigina
    • Associate Manager - Projects, Covansys

    It is important to evaluate performance but it is also important to define the matrix against which the performance is being appraised correctly. Failing to define a correct matrix leaves room for some inequities to set in. The parameters of judging individual performance vis-a-vis corporate performance cannot be evaluated correctly unless we talk of measuring individual ROIs. Tying the individual performance to income and expenditure statements does not help, nor does trying to measure them to some perceived set of goals rather than actual and real ones.

     
     
     
    • Rajesh
    • Head PMO, Cadila Healthcare Ltd

    First: Performance reviews should never be a a distasteful exercise, since a distasteful thing is never done with commitment. It is up to management to establish a conducive environment so that its purpose is clear to the participants.

    Just as no activity could be "for the sake of it" in business, the performance review has to have a purpose which is clearly communicated and practised throughout the organization. It has to be linked with rewards ... any form of reward from compensation to recognition.

    Second: I do not think there is any need to change its name or title. I also think there is a need to underline and expand the scope for a forced ranking system. Perhaps it changed GE and made it into a formidable enterprise only because it could not tolerate last 10 percent. Incidentally, does Harward have same system as well? Perhaps Yes, and the results are evident.

    Clarity in defining what is expected from a role, providing training when required, and expecting that the output is delivered is always better than justifying why it cannot be done and endorsing a culture that support such logic.

     
     
     
    • Malvin Bernal

    The idea of performance reviews lies at the focal point of all a company's vital activity. All internal company interactions and future trajectories rest on the result of the performance review. Before a company can make great leaps to the future, it would need to assess whether it has the intellectual capacity to leap-frog. Performance reviews basically give them that diagnosis. Viewed from this perspective, I don't see performance reviews as distateful nor as a routine ritual design to outline what has been done and how we will compensate the employee.

    I'd like to add, though, that for performance reviews to really serve the interest of the company, there should be an accurate reading of what needs to be done and how such shortcomings will ever be addressed. Personal improvement programs can only do so much. Companies should learn when to use incentives and when to employ consequences if we are to have a peformance appraisal that can truly reflect performance.

    In essence, to have a good performance review, we should apply Jack Welch's 4E's. We should have the energy to energize. The Edge so that we can Execute our programs. This includes performance reviews.

     
     
     
    • Deepak Alse
    • Project Leader & Product Engineering Coordinator, Wipro Technologies

    Performance is the other side of personal development. Organisations cannot survive without performance reviews. However, most performance reviews are conducted by ill-trained managers, often without adequate attention to the ongoing process of coaching. The process is not at fault, its execution definitely is!

    Two critical elements of measuring performance are context and orientation. In most cases, performance measures are set without a clear explanation of the context and the goal orientation needed. Performance and personal development go hand in hand and organisations must include achievement of personal, group, and organisational goals in the performance reviews.

    At Wipro, we have a multi-dimensional performance review mechanism that includes achievement at all levels -- Personal, Group, & Organisation -- as a factor. Compensation reviews are not solely based on performance reviews but also based on the economics of the role.

    Forced ratings are essential to the process of indicating where a person stands in an organisation with a massive workforce and human inconsistencies of rating. So long as the rated employees have an opportunity to disagree and discuss their rating, the system can remain fair.

    The only way we can get rid of the forced ratings process is when we are able to create smaller groups, across the organisation, led by leaders who rigorously follow the process of coaching and are willing to help non-performers find their niche either within or outside the organisation.

     
     
     
    • Anonymous

    Forced ranking creates heartburn and agony in organizations that have "failed" for years to be truthful and honest with their employees regarding "poor managerial skills and behaviors." It has become a way for organizations to reward a very small population, not always the population that has produced the best results. It should be revamped at best.

     
     
     
    • Michael F.
    • Consultant PE, Self-Employed

    As a self-employed consultant, I believe if employees took an entrepreneurial view of their work and companies effectively managed the tasks and the resources required to run the business or project, then performance evaluations would be unnecessary except where the tasks are not being performed as required.

    Consider the contractor or consultant that is hired to perform a task, is paid a market rate, and leaves after completion of agreed-upon tasks. In the case of poor performance, changing conditions, or lack of management, the consultant can be told to leave (contractual agreements notwithstanding) on a moment's notice. This is an ideal arrangement and one that employers are making when they can sufficiently arrange a legal degree of separation between themselves and a worker. While there have been abuses, this arrangement can be mutually beneficial to both worker and company. Admittedly, this type of arrangement favors the highly skilled or scarce skill that commands top compensation, but can be extended to other skills considered commodities where performance parameters are clear.

    I point to this purely causal relationship between employees and employers to demonstrate that if an employer has a task that requires a resource and that task is matched to a person who is competent with skills equal to the task -- be they general or specialized skills -- then this match can be sustained as long as the business requires the activity. Some will perform better than others, but if we define acceptable performance as a step function and assign tasks to each employee according to their skill, then ideally you do not have unacceptable performance.

    When performance falls below a certain threshold or the task is complete or conditions change, then the employment arrangement must change. Typically it is when the employer's need for the resource changes that performance becomes focused on distributions. Using forced distributions, normal or right-lying performers now become suspect when there is a capacity reduction issue. Job survival becomes relative to peer group skills and attributes, rather than the skills required for the task that has been performed acceptably to date.

    Why then, knowing human performance is typically normally distributed, would management have a need to point out to a person sufficiently performing the task they were employed to do that they are at the lower end of the distribution compared to their peers, in order to change what was heretofore a suitable arrangement, because the work has run out? It all sounds mundane, but a person is either doing the job or they are not, or the work is complete and the employee's services are no longer required. Responsible employers should have the right to choose whatever resource to keep as they see fit -- in the absence of forced distribution performance appraisals. Those responsible individuals that are asked to leave can do so in a dignified entrepreneurial way, knowing they met the requirements of the job, performed a useful service, and are better prepared to market their skills elsewhere.

     
     
     
    • Anonymous

    The forced ranking performance review process is simply one type of performance evaluation tool. As with any tool, you must be sure that it is appropriate in the context of your organization's culture. Forced ranking works at General Electric because they have the proper organizational culture. Their managers truly value the integrity of the process and provide honest feedback.

    In order for a forced ranking system to work, managers must believe in the value of performance evaluation and value honest feedback over political bias, and there must be clear communication around the process across all lines of the organization. Of course, these factors are important to the success of any performance evaluation process; however, given the consequences of forced ranking, the magnitude of these factors is amplified.

    Organizations should bear in mind several aspects when considering the success of their evaluation process. First, managers must be trained in the process and informed of common rater errors. Second, the process should align the employee's goals with the organization's goals. Third, the evaluation form should be viewed as documentation of performance discussions that should be taking place between the manager and employee throughout the performance year. In other words, the focus of the process should be on the discussion rather than the document. Fourth, the employee should be recognized and rewarded for successful performance. Finally, there are always opportunities to grow. A good development plan should derive based on discussions around the employee's performance.

    No matter what you call it, the performance evaluation is an important tool in organizational effectiveness. If used appropriately, it provides the employee with a clear view of how his or her performance fits into accomplishing the organization's goals. It is necessary to review past performance to guide and shape future performance.

     
     
     
    • C. J. Cullinane

    Rank and yank, produce or be reduced, are not new to business but have been in practice a very long time. They just they were not formalized. W. Edwards Demming, for whom the Demming Award in Japan was named, considered performance reviews a waste of time. He said they should be performed on a daily basis with feedback to the employee a constant factor.

    In my opinion, the rank and yank approach is often a political or popularity contest rather than an approach that creates real productivity improvements. If value and profitability are the criteria used, "rank and yank" is good, but how often do personal attachment, personal history, and just plain bias get in the way of a good decision? I would bet often.

    I agree with Dr. Demming: Performance should be reviewed with an employee daily and if the employee has a problem they should know about it as soon as possible.

     
     
     
    • Anonymous

    Our corporation requires that we write our evaluations in June, but we do not give them to the employee until October. Lots of things, good and bad, can happen in those four months that can make giving the evaluation very difficult. I know we are to do ongoing coaching and evaluating, but if you give them a high score on their performance in June and then things deteriorate, how do you justify that score in October?

     
     
     
    • Richard Tiedeman
    • Workforce Manager, Local government agency

    I have worked in the government sector for over thirty years and have spent a great deal of time designing or redesigning performance management systems. They come, they go, and I am back at the drawing board.

    Almost any system would work if organizations truly fostered an environment of continuous feedback. I have come to the conclusion that supervisors simply dread the thought of discussing performance with employees and find the once-a-year paper process a welcome alternative to authentic feedback.

    My dream system? Force every supervisor to meet with their employees on a monthly basis and record the answers to three questions: 1. What is going well? 2. Where could you improve? 3. What obstacles hold back increased performance?

     
     
     
    • Anonymous

    The apprehension about and negativity associated with performance reviews signifies a lack of communication between manager and "managee." If objectives are clear and measurable, and if regular discussions occur throughout the year, no performance review should contain negative surprises. At Stryker, each manager has regularly scheduled one-on-ones with direct reports. This is considered to be for the benefit of the direct report, not for the manager. I find these discussions helpful for keeping my manager informed about progress made toward goals and for gaining her feedback about that progress. It also provides a forum for discussion about my career development.

    By the time my annual review comes (and I write my self-appraisal), I can prepare based on ongoing communication throughout the year. Any difficult issues have already been raised. There has been only one negative surprise on a review during my nearly four years with the company, and that was my first review.

    Performance reviews could actually become a time to celebrate accomplishments and talk about the next area(s) of career development.

     
     
     
    • Jose Garcia
    • Workforce, Succession Manager, PA DOH

    As a Human Resource professional, I understand the importance of establishing a baseline of performance goals and objectives, but what may be missing is the concept of ingenuity in work settings. I am not talking about the standard concept of thinking outside of the box as ingenuity, but rather the concept of progressive macro-managerial influence.

    As managers we get caught up too easily in giving recognition for a job well done, but lose sight of macro-influential networking from the frontline employee to the board member in expanding the broad base of what could be done.

    I am reminded of what Ken Blanchard stated: "The key to successful leadership today is influence, not authority," and with that comes the question, "Do we really influence/ or do we just state equivocally 'What we want is performance?"

    The most successful companies in the world look now at how they can influence their workforce to look with a macro-minded mentality and goal.

     
     
     
    • Dean Turner
    • COO, Pierce Atwood LLP

    As the author of literally hundreds of written evaluations over the years, I supposed I would love to have all the hours back that I spent on creating them. Nevertheless, I think the individauls I have sat down with to go over their performance and the organizations in which I worked at the time are both better off as a result. It is unrealistic to provide feedback on a daily basis, and it is necessary to have some kind of discriminator for making decisions.

    Ranking is another matter. For years, grade inflation was the way of the world within the officer ranks in the military until ranking was introduced. And while you can still say that Officers 1, 2, and 3 are without peer in their performance and award them the highest possible scores, one of those poor souls is going to be ranked number 3 of 3 and likely will not promote. Perhaps that is what the system is designed to do. On the other hand, when you receive "straight A's" on a performance review but, due to ranking, are told you are last out of some number in a peer group, the grades lose a lot of their luster.

    What's the best system? After 40+ years in the work force, I am still searching for it.

     
     
     
    • Gagan Adlakha
    • Director, Vyaktitva

    I believe the best results are got when "performance management" is "work management" rather than a post facto exercise. The prime responsibility of a manager is to manage the performance of people and that is best done proactively and with joint ownership.

     
     
     
    • K. Hamm
    • HR Coordinator, MN Valley Action Council, Inc.

    I use the analogy of owning a car. A car is a resource I use to get from point A to point B. Do I wait until the end of the year to see what maintenance should be (or should have been) done to keep the car running productively and efficiently? No. Do I check the oil and tires and so on during the year to make sure it has the ability to get me to point B? Of course. If the oil's low, do I add oil? Sure. Is there any reason to compare my car to my bicycle, motorcycle, or boat? Not really. How about the neighbor's car? Maybe. But only if the neighbor is driving to the same point B as I am and everything else is equal.

    My point is, if I'm going to use a resource -- human or otherwise -- I need to constantly evaluate the destinations I want to go to, the things the resource I'm using needs to get there, and provide what I need to provide before I start the trip. Yearly reviews only check the mileage, consumptions, and maintenance history and help me extrapolate what sorts of work I might expect to do as an owner to keep the car running smoothly during the next year. Set goals, do the maintenance and checks, review the destinations and requirements. Repeat as needed until the car needs to be replaced.

     
     
     
    • Brent Beachy
    • Regional Marketing Director, MINTEQ International, Inc.

    Many companies confuse employee performance evaluations with incentive payments. The performance evaluation should be geared toward driving and reinforcing the activities and behaviors to reach the desired result of the business. In most businesses the metric for incentives is operating income.

    As the end of the year approaches, managers and executives naturally scale back employee ratings to match the actual performance of the business. This undermines performance management reviews and alters the measurement scale that was originally established.

    Personal performance measurement to determine merit increases, improve skills, and direct controllable actions is necessary and beneficial. When personal performance is communicated relative to business performance, the exercise is discounted.

    In a nutshell, pay for the results, and review actively to manage performance.

     
     
     
    • Tery Tennant
    • Partner, Attainment, Inc.

    I too largely agree with Deming: reviews should be continuous and there should be no surprises. If employees are our most valuable asset (and of course they are), reviews should not just be a sporadic or once-a-year thing. It is always amazing to see how some organizations pay so little attention to their employees -- far less than they would a less-valuable material asset.

    So it stands to reason that if people truly are the most valuable element, management should not try to constantly take the easy way out by providing just the obligatory annual review. And if we want to develop this most valuable asset, then we will find creative ways to do this without injecting more fear into the process, which will tend to diminish the person's desire for development.

    Therefore, I think forced ranking is injecting fear into the workplace. Similar to what Southwest Airlines found out, dialing in an ever-increasing metric to better assign blame only resulted in a lot of nonproductive competition and "CYA," and the core problems were buried deeper. If we want people to be open about the issues in the workplace, and to create an atmosphere where everyone is eager to develop, forced ranking doesn't seem to be the way to encourage this.

     
     
     
    • Fidel Davila
    • Founder/CEO, objectHEALTH

    First, according to the forced ranking model, the "bottom 10 percent" should be fired. Thus the tenth fastest man in the world in the Olympicss 100 meter dash is not worthy of racing for his country anymore. The bottom 10 percent of SuperBowl winners may be better than the top 10 percent of the bottom team; nevertheless, you fire the former and keep the latter. This ranking should be in light of the strength of the groups compared to other groups. A little fish in a big pond may be worthy of keeping and the big fish in a little pond may need to be fired.

    Second, the following performance evaluation system evaluates a person according to what she or he does and not against fellow employees:

    1. Did you do your job with excellence? If so, how is this documented? (This leads to an average or within the 70 percent rank. Excellence is a minimal requirement.)

    2. Did you problem-solve? If yes, what problems were solved and what was your level of participation? (Problem-solving is a major part of anyone's job and it makes problem finding a goal rather than an avoidance. This leads to higher ranking in the 70 percent group.)

    3. Did you innovate? If yes, what were these innovations and what was your participation? (Innovation then becomes a goal for the high performers. This with problem-solving leads to the top 20 percent ranking.)

    Unfortunately, many corporate employers don't see problem-solving and innovation as differentiating someone from a person just doing their job with excellence. Pity. They foster frustration and job hopping.

     
     
     
    • Terry Ott
    • Retired HR Exec & Consultant

    After all these years of discussing and researching, don't we all agree that performance reviews should be but one part of a continuous loop of planning, coaching, providing spontaneous feedback, and so forth? Linking performance evaluation to compensation is inevitable, but "how?" is unanswerable without knowing the pay program design and the culture of an organization.

    In my experience, the single most helpful aspect of performance evaluations involves gathering input from co-workers with whom the employee works or has had substantial contact or involvement. This data, summarized for the employee in a constructive way that protects confidentiality, is powerful. In many cases, because of how work gets done these days, peers, team members, project collaborators, and internal "customers," etc. are in a better position to evaluate than "the boss" is.

     
     
     
    • Anonymous

    My observations having been in jobs with directly measureable results (orders, revenue) and in back-office staff functions (Marketing, Engineering) in a Global Fortune 100 company: Objective setting in back-office functions is extremely poor and vague; there is a tendency just to continue with the ranking the year before; when you move from one organization to another, there is a tendency for managers to protect their old buddy's "high performer" ranking. You get punished for making cross-company moves and joining an existing team.

     
     
     
    • Jeff Fierstein

    What Deming was referring to when he suggested throwing out our performance appraisals was that we cannot expect to solve performance problems or improve performance unless we appraise the performance "system." If we consider a "fishbone" diagram, "people" would simply be one of a number of possible "bones" of root-cause performance discrepancies or improvements. Appraising the performer without appraising the entire performance system simply isolates the performer as the probable and sole cause of the performance. Deming would suggest that we appraise the whole performance system, including other "bones" of the fishbone -- material, methods, machines, measurement. Otherwise, the true root cause of performance may not be discovered. So, performance reviews should be ongoing feedback that assists in appraising the performance system on a constant basis.

     
     
     
    • Keith R. Jarvie

    The quality of implementation will largely determine how performance management systems will be viewed. Ongoing training and support are important for ensuring a baseline level of quality and equity across managers. That being said:

    1. Managers are not omniscient with regard to how best to achieve corporate objectives.
    2. Objective and valid measures of staff outputs are often difficult to define in "knowledge intense" industries.
    3. Transformative projects or initiatives may occur over a timescale in excess of that mandated by annual reporting. Annual evaluations can be a useful tool supporting both staff and corporate needs. Their implementation should reflect and support corporate culture with regard to the value of working within and outside of teams, the tolerance for risk-taking, and expectations around innovation. Concerns of bias, capriciousness, and poor validity underly the lion's share of discontent around performance management.
     
     
     
    • Anonymous

    I have worked in healthcare management for more than twenty years and have had to implement over six different versions of performance reviews. The most de-motivating of those reviews was the forced ranking model. It was designed more to facilitate budgeting of salaries than to motivate and reward employees for a job well done. Also, when people's live are at stake, we had to be meticulous to monitor performance on an ongoing basis, not just annually. Thus, at the end of the review cycle (which was a year), our poor performers were already gone from the organization. So to shift the curve to fit the forced rankings assumptions (the bell-shaped curve) was not representative of the performance of those employees remaining.

    The most effective model I have had to implement was Deming-philosophy-based and assumed that everyone did a satisfactory job and did not tie performance to reward. However, we did add to that skill-based pay or project/performance goals (3-5) that would support the organization or department strategic initiatives or self-development. Also, good performers were able to get promoted. This is when we achieved the most growth in our department and organization; employees were put in control of whether or not they achieved their goal and therefore their reward. Performance issues were addressed in real time, not once a year at review time.

    This latter model takes time on the part of managers and mentorship skills, and organizations have to be willing to invest that time and agree that it has value.

     
     
     
    • B. Greenspan

    On forced ranking, I refer my colleagues to the writings of Deming. There will always be a bottom 10 percent, and arbitary cuts from an arbitrary ranking system are not the way to go. Rather, use the system to identify and promote the rising stars.

    As for development plans, what seems to be lacking in many companies is the support to actually help employees develop. I have been fortunate to work in many organizations with development planning. The fortunate element was my manager and his willingness to commit time and money for my development.

    I have known many colleagues in other organizations where the review systems are essentially "fear based." How can a person get a helpful review when the manager is more fearful of his or her review?

    And, although companies like to say the review is decoupled from the salary actions, my experience says it is never decoupled. It is just separated in time to make it less obvious. And, it is naive to think that workers don't know this. When was the last time a person with a poor review got a bigger raise than a person with a great review?

     
     
     
    • Anonymous

    To rank everyone in the same group assumes everyone in that group is doing an equal (and equally measurable) set of tasks. I believe this is a flawed assumption in most cases.

    I've worked in environments where there was GREAT clarity around goals, performance, and disclosure of performance, but these positions were highly defined, lower-level operational roles. As the organization becomes more departmentalized, matrixed, tiered within teams, and sophisticated, I believe the ranking exercise becomes less about productivity and more about popularity.

    My career experience leads me to make the observation that managers are far more nervous about reviews than their reports.

    All that aside, if management perceives of an individual as being in the bottom 10 percent, it's a useful process to let them know so they can be coached or move on. It's also great to be acknowledged as a high-performance employee.

     
     
     
    • Aline Gianfagna
    • Vice President, Raize Professional

    Our family of companies separates our annual performance review into two meetings, the review of last year's performance and another meeting to set goals and objectives for the upcoming year.

    An employee's salary review is a distinct and separate entity and occurs on the employee's anniversary of hire. This separation has been invaluable in maximizing the return on investment for performance reviews in general. No longer are employees paralyzed, barely listening and myopically focused on their salary increase during their performance review. They are well aware of what to expect in December or January.

    We limit our objectives to five for most employees. These objectives are derived from our strategic planning process. Our first year strategic objectives become our operating plan and each action item on that plan is assigned (with a timeframe) to an individual or team. It is very easy come review time to determine whether goals have been met.

    Our forced rank people review (ABC Analysis) is modified to fit our culture and management style. The parameters for each rank are very clear. In all of this, communication is the key. Managers must know the guidelines and the entire company must know the philosophy behind the people review process.

     
     
     
    • Ira Teich
    • Professor of Management and Marketing, Lander College for Men, Div. of Touro College

    As a member of the workforce that's probably the most often reviewed in society, I have some very strong feelings about employee reviews. Let's address the issue of peer evaluations or evaluations by subordinates of their respective superiors. Let's also mention outcome assessment, which incorporates the previously mentioned types of evaluations but adds the customer element. Let's face it, we as an organization exist to satisfy our respective and future customers, and therefore, ought to be interested in what they have to say above and beyond purchasing and complaining.

    Strengths and weaknesses exist with the way people are evaluated. No system is perfect, only the system which fits our organization's current and immediate future needs. Once we can recognize and correct the shortcomings of our present evaluation system, we can try to improve it. I've seen too many talented and worthy faculty who were not granted tenure because of some obscure and arcane regulation of "tenure or out." I've seen too many capable administrators chewed up by deadbeat tenured faculty. I'm sure similar experiences occur in every type of organization regardless of the evaluation system. As I write this, I'm being evaluated by my dean, students, and peers, as well as a member of my college's outcome assessment committee.

    I sincerely hope the revered Deming would see the value in a longitudinal evaluation coupled with a daily dose of healthy feedback.

     
     
     
    • Anonymous

    Reading about forced ranking makes me wonder if there is a correlation between dissatisfied/unhappy employees and those who are ranked in the bottom percentile, since most other studies have found that about this percentage of employees at a given organization, on average, are unhappy with their jobs.

    While most companies focus on a narrow area of performance management for most of their employees, I think they would be better suited in hiring life coaches for most of their employees. We've entered the age where only the most creative companies will excel, while the rest are forced into commodity businesses where the lowest cost center anywhere in the globe is where the work will be performed. Thus I believe performance management should implement initiatives to promote creativity through life coaching of all employees, rather than pigeonholing them and trying to make a square peg fit in a round hole. A little research in this area would indicate that companies like Google, which forces all hires to spend 20-25 percent of their time on developing and exploring their own projects, are more likely to be the model of the growth, innovation, and creativity engines of the future.

     
     
     
    • Anonymous

    As a former manager in several and now a management consultant to many Fortune 100 companies, I have repeatedly witnessed the performance appraisal process twisted to accomplish otherwise determined political objectives: promotion, resource assignment, reorganization, rewards, transfers, demotions, and of course terminations. As a former military officer, I saw many individuals game the forced ranking system to achieve promotion by writing themselves up for medals and awards. Never have I witnessed any appraisal system to result in measurable improvement for its organization. Why? Because the appraisal process is typically focused on identifying and improving an individual's faults or, at best, reducing their obstacles to achieving a subjective idealization. It has little or nothing to do with building on an individual's strengths. Such systems elevate mediocrity to the goal. And changes in compensation often benefit individuals at the expense, rather than to the betterment, of the organization.

    People will always do what they get rewarded for doing and avoid or neglect the rest. When we can do that alignment right, we will have done the right thing for both the individual and their organization.

     
     
     
    • Rowland Freeman
    • Member, SCORE Williamsburg

    Having been on both sides, reviewed and the reviewer, I srrongly support performance reviews. A major part of my salary (50 percent) depended on the results of that review. And believed me, I worked for that as it was great motivation. My grader was the executive VP, a very perceptive and excellant reviewer. As a reviewer, it took me quite a while to learn how to do it well, particularly to avoid any antagonism during the interview.

    Much of the problem I have observed over a number of years is the lack of training for reviewers. They are more concerned with the interview than the interviewee. I now do the same thing in a not-for-profit organization, and it is not used for hiring or firing but for improving the quality of counseling. I spent a great deal of time on fitness reports which used the percentage basis with no particular problem -- except over time the system got skewed to the high side.

    Today we are far more concerned with self-esteem, and worry so much about hurt feelings. Many times we do not face perfomance issues. I consider some type of ranking essential for promotion purposes for the health of the organization.

     
     
     
    • Anonymous

    All staff are encouraged to submit a self evaluation, but only a few participate. I do; none of the staff that I supervise have yet. Hopefully in the future they will see this evaluation in a more positive light.

    The positive side of self evaluation is reaching out and patting yourself on the back when you have an opportunity. It may be the only pat you get in awhile, and if you don't pat yourself on the back because you believe in yourself, why should anyone else? "Good job! Well done! You are appreciated!"

     
     
     
    • Hujaj Ali Nawaz Khan
    • Senior Reservation Officer, Pakistan International Airline

    Forced ranking is a good assessment tool when organisations and individuals are ready to go through this model after having gained complete understanding of the tool as well the work ethos prevailing in their organisations. But most organisations use this model at the edge of reengineering, where firing and frightening are required. Forced ranking should be used when every part of your organisation is working above the industry standard, so that you will be given something over and above your regular reward. Forced ranking is never the milestone for a trust building culture. Sometimes it is just the support for management decisions. "Free Individual Ranking" (FIR) assesment should be carried out instead of forced rankings: The employee is supposed to appraise himself according to his idea of how he should be appraised; and in every organisation you will find a different trend of how employees want to appraise themselves as well as which model they want to use, depending on the inputs they use, outcomes they are expected to deliver, the envirnoment they work in, the industry they compete in, and much more.

     
     
     
    • A. J. Balasubramanian
    • Head, Human Resources, CareVoyant Technologies, Chennai, India

    No doubt continuous feedback is critical to improving individual and group performance. The most important job of any manager is helping people to continuously improve their performance. Most employees welcome clear and goal oriented feedback with a positive mind. It is when the employees are directionless that they perform badly and become less productive. The performance appraisal process is important to keep human resources focused in the right direction.

    Of course, daily feedback is also a part of the overall performance appraisal process. The periodic appraisal process is essential to review the performance of an employee over a period of time, as most often significant contributions cannot just be measured in very small intervals.

    The manager's role during the performance appraisal process is to be genuinely interested in the development of the individual who is being assessed. It is similar to the role of a sports coach of a team. During the performance appraisal there is also scope for the manager to change the role of the particular individual, depending on the employee's core strengths. The performance appraisal dialogue can also empower employees to come with honest feedback about how the manager and the organization are performing to help and facilitate his or her own performance and development.

     
     
     
    • Alex Pendleton

    If our businesses are to successfully adapt to the future "career" model of flexible working arrangements between the employer and the employee, anything we can do to make people happy to and want to work for that particular manager/company has got to be a good thing. But annual performance reviews that take hours to prepare for and have dubious value? Maybe these should be quarterly check-ups. It's how global companies report out on the performance of their best assets.

     
     
     
    • Abbey Mutumba
    • Assistant Lecturer, Makerere University Business School (MUBS), Kampala, Uganda, East Africa

    It is better to refer to performance appraisal/reviews as "personal development reviews" to make the process more strategically fit with overall organizational performance goals and objectives. Employees need to feel that the process enables them to achieve their personal development goals for better organizational performance. Even today's lesser performers may be enabled to become better performers in the future if they are developed, other HR factors kept constant. At my company, Abbedax, I do so, and I have managed to improve on my team's contribution to Abbedax's overall performance. However, we are just a company of four people including me, the director.

     
     
     
    • Lawrence Nwaru
    • Quality/Special Projects Manager, United Parcel Service Nigeria

    The performance evaluation as a yearly ritual is necessary to provide the desirable feedback on one's performance. The form of feedback used reinforces or negates the objective of the evaluation process. Aside from using the performance evaluation as a way of stimulating improvement on work processes, it also provides opportunity to develop and remunerate employees accordingly.

    Given the scenario in the private sector in Africa, the feedback form is a measure of success in the performance evaluation. Two types of feedback are used to support effective performance reviews: motivational feedback and the formative feedback.

    While it is important to consider the appropriate feedback to use at any given time, a combination of these feedbacks at one time could backfire. Motivational feedback stimulates performance while formative feedback offers opportunity for improvement and challenge.

    No one can achieve performance improvement if he or she isolates the performance review process. What matters is how, when, and where it is used.

    Managers should develop skills in this area if the objective of the performance review is to be achieved.

     
     
     
    • Anonymous

    I propose that performance reviews remain anonymous between employee and manager and are not used for promotion or pay increase purposes. Pay increases should be uniform across the board and based upon overall company performance. The incentive to contribute is still there, provided you can convince your employees that everyone contributes to the company's bottom line. If the feedback is anonymous and doesn't end up in an employee's personnel file, then perhaps the managers and employees will both be more honest regarding performance.

    If you are performing this evaluations, please go back and review your evaluations from the past few years. Do you consistently give others like you higher marks even though performance was equal? Do you give someone higher marks because you trust them more or just like them more? Think about the results of that higher ranking. Are you really doing what's best for the company or just trying to surround yourself with others who think the way you do? How will you ever expand your company into new markets if everyone thinks just like you?

     
     
     
    • Anonymous

    I have experienced the review process on both sides of the Atlantic as both a reviewee and a reviewer. I have also received excellent and poor reviews at different times from different managers.

    If the goal of the review process is to encourage good behavior and discourage bad behavior, then my experience is that the review process is a very blunt instrument indeed. Personally, I have never had a review which I feel has led to an improvement in my performance (in terms of anything measureable). Reviews have taught me how to play the political game better, though, and I now spend more time on playing the system rather than trying to accomplish goals. Step changes in my performance have occurred, but they have occurred on the rare occasions when I worked for a manager I truly admired, and these profound changes were completely decoupled from reviews.

    In all the discussion about reviews, it's noticeable that the one thing that's missing is any discussion of measureable results of review systems. If forced ranking is a great way of ranking employees, then that should be an observable phenomenon in company results. If other ways of ranking are better, that should be observable, too. I also notice the absence of any personal testimony here about positive effects on the reviewee.

    I can't help feeling that the review processes in their current form only benefit one group of people, the HR "professionals" who apply them. How many HR people actually look for feedback on the review process itself? None, in my experience!

     
     
     
    • Anonymous

    If the time between performance revues is too long, and optimistic goals have been set early, and fixed in concrete, there are problems when fairly assessing those who have been given fuzzy goals ("improve x") and where the nature of the work is prone to "gotchas" and stumbling-blocks outside the control of an individual. These need to be taken into account, as tasks with many unknowns and unforeseen hurdles are usually given to the best people.

    Often, the nature of the metrics can lead to behaviour that is counterproductive. A helpdesk, measured by number of calls taken, can meet those goals by not giving customers the attention a problem deserves, which can lead to customers ringing many times. The helpdesk could spend less time overall with a customer by spending more time on the first call, and ruin their performance performance figures, while the happy customers make sales teams look fantastic because they retain those customers. The interdependencies of different teams should be taken into account, but this is tricky.

    How do you measure performance of individuals who might be moderate according to their own goals, but are key nodes for information transfer across an organization and are constantly interrupted, and provide significant intangible benefit unrelated to their specific work? (Remember, 75 percent of the market cap of an organization is made up of intangible assets.) This demonstrates the rule that many local optima may not lead to the global optimum.

    What is an appropriate cycle for formal reviews, and the proportion of informal reviews? What are the criteria for adjusting goals? These often depend on the maturity of the organization or whether it (or the individual concerned) is moving into new territory.

    Answers? I have none. This is still a developing discipline.

     
     
     
    • Stephen Mugford
    • CEO, QQSR, Australia

    Maybe it is because my background was as an academic sociologist before I ran a business, but I think this excellent discussion would be strengthened by looking at a "big picture" context. Most comments are looking inside the company/organisation at the performance of employees, but not linking it to wider considerations.

    Three things strike me. First, many (not all) of the comments imagine the performance of employees to be a function of their inherent capacity or current motivation. In many cases, however, a poor performer in location X is a good performer in location Y and the difference lies not in the person but in the context and in how she was managed. One of the best Air Force leaders I know told a wonderful story of being a squadron CO of a squadron that was not performing as well as he would have liked. He called his four immediate subordinates in, closed the door and said, "Guys, things aren't going well. What am I doing wrong?" When a colleague asked about the response, he said, "Well, they spent 15 minutes telling me. Then they spent an hour talking about what they were doing wrong and we never had to have that conversation again." So the idea that the managers are the first issue and need training, which a couple of people have mentioned, seems to me the starting point.

    The second thing, which again only a minority have mentioned, is that the bottom 10 percent of a given organisation might still be outstanding. It is said of the Australian Cricket team, which is ranked number 1 in the world by a long way, that it is harder to get out of it than to get into it, a comment that refers to the enormous stability of the team and the unwillingness of selectors to drop players who are going through a bad patch. In almost every case in recent years, the player going through the bad patch has emerged into good form and the side has won competition after competition.

    The third and most important thing, however: Not only is there a "war for talent" going on, but most OECD counties are facing the fact that the population structure is aging and fewer young people are coming onstream to replace baby boomers. In this content, making the primary link between performance reviews and performance improvement, while simultaneously downplaying the link to firing, is likely to be a strategy that will become increasingly relevant.

     
     
     
    • Siddharta Govindaraj

    First: Identify the goals of the review. I absolutely agree that the review is often used for far too many reasons. In my company the review is used to give feedback to the employee (coaching), for compensation decisions, for promotion decisions, to identify new opportunities for strong performers, for personal development, and for assessing the human resources available to the company. With so many disparate goals all riding upon the single review, is it any surprise that it is a stressful affair?

    Second: Avoid surprises. Most of us consider ourselves above average. A study found that 60 percent of leaders consider themselves in the top 10 percent, and 98 percent think they are in the top half! Employees enter the review thinking they are in the top of the stack and come out of the review bitter, disappointed, and hating the company.

    What would my ideal review be like?

    Coaching and personal development should be disconnected from the review. Managers ought to be in constant communication with their direct reports, where these topics should be tackled. Whether someone should be given opportunites or asked to leave is a decision which the manager closest to the person is best placed to take. By the time the review comes around, the employee should know exactly what to expect. Salary and promotions should also be handled in a separate meeting.

    The actual review should just be a summary of the year's proceedings. Reviews seem to have taken on the form of a "test" that hands out "grades" and the employees either pass or fail. Instead, the idea of the review should be something like a project retrospective: to see how we can improve in the future, and reward those who have done well.

     
     
     
    • Prabhas Sinha
    • Product Manager, Digite Inc

    Transparency is the key, and it depends upon the immediate manager and HR policies. In my opinion, there are 5 factors involved in the successful implementation of a performance appraisal system:

    1. Manager's competency: Is the manager trained enough to boost an employee's potential? Can s/he contribute to employee development and learning? If not, then s/he should be absolved of this critical task.

    2. Short set of goals: Typically people end up making a laundry list of items, and it never results in anything that can be fruitful to either employee or employer. For example: make a list of 5 things -- 3 that are important for the business, 2 that would result in steep development of the employee.

    3. Conducive support: The organization must support these goals so that it is easy to achieve them. Essentially it is a closed loop system whereas in most cases it it treated as an open loop system i.e., goals are set in January, employees are appraised in December. Performance stewardship is required.

    4. Don't link to salary: A salary raise should not be linked to performance appraisal. That's where the system fails. Don't penalise the non-performers; instead, distribute bonuses to performing employees. This would give incentives for people to contribute more.

    5. Reverse appraisal: It is tough to implement but yields good results and productivity. It is tough to implement because managers don't want it. Reverse appraisal always builds trust and bonding in the team. Have the intellectual honesty and courage to route it to your boss (cc to employees) so that they know that it wasn't a hogwash.

     
     
     
    • Sivaram Parameswaran

    Besides the ability to aid the personal development and compensation derivatives of the individuals, the review process is also a mechanism for the firm to take stock of its core strengths. A "forced feedback" system can be an aid in that regard to assess the spread of the firm's "vitality curve."

    Not recognizing star performers with the notion of compromising team morale can bring as much damage to the team as poor performance. This is where most good managers prefer to play favoritism with their star performers, and it is done for a very valid reason. After all, what are we to gain by recognizing poor performance and striking a balance with team morale? Instead, using a perfect yardstick to recognize and reward star performers can turn out to be an excellent motivating factor for the rest of the team and contribute towards better returns to the firm.

    Bottom line, what matters most in any successful performance review process is a perfect yardstick and unflinching integrity towards applying the yardstick towards the entire mass.

     
     
     
    • Aparajita

    The intent of reviews should be to identify performers, reward them, and identify development activities for employees performing below expectation levels. Reviews should not be used as a stick to punish misfit employees (non-performers?).

    Performance reviews should be linked back to the recruitment process. If we have recruited a bottom 10 percent employee, where did we go wrong in recruitment? I am sure no organization would like to recruit a misfit employee. If the aim of an organization is to attract, nurture, and retain talent, performance reviews and recruitment process reviews should go hand in hand.

     
     
     
    • Priyavrat Thareja
    • Faculty, Pb Engg College

    If top management (the author of performance reviews) can engineer improvements, the mission is accomplished. If not, then someone should find the root cause of failure. Whose responsibility is it to search for such discrepancies? The onus of nonfunctioning people is either on Control or on the wrong choice/selection of people.... If they are doing their job, then where is the need for performance evaluation? It is the initiation of "documentation" mapping the individual's growth -- a growth path or mission fulfillment/competency improvement, etc.

    A negative prognosis may be used towards the iddentification of the following:

    1. Was the person inherently bad?
    2. Is the manager doing the performance evaluation possibly Bad (leadership/competence and all that)?
    3. Any problem in environment?
    4. A biased/wrong performance evaluation itself?

    If it may interest some, I had addressed various MD's of Punjab Cooperative organisations, and had detailed discussions on some of these aspects of performance reviews. They unconditionally agreed that performance reviews were a mirror in which one could assess the state of health of the organisation, and more so were a scorecard of the efficacy and growth of teamwork.

     
     
     
    • Wally Bock
    • Three Star Leadership Enterprises

    What is the purpose of the review itself? In many organizations the review process doesn't seem to have much purpose. The forms and evaluation areas look a lot like a third grade report card. "Times Late/Times Tardy." "Works and Plays Well with Others." Many companies imagine the process as some kind of prophylactic against lawsuits.

    If a person's immediate boss is doing his/her job, the formal performance evaluation becomes a quick recap of performance issues in the period covered and a look to how things should go better in the future. When I conducted research on the differences between top performing supervisors and others, I found that the top performers spent a considerable amount of time in the actual performance evaluation meeting, while their less effective peers seem to try to get it over with as quickly as possible.

    The more effective supervisors spent the bulk of their performance evaluation meeting time talking about the future. They could do that because both they and their subordinates came to a meeting knowing where things stood. The supervisors had used encounters throughout the period to coach, counsel, correct, and encourage. Subordinates got to say their piece and explain situations. Both generally thought that evaluations were fair.

    A note here on the forced ranking issue. GE is often the poster child for forced ranking, but hardly any commentators discuss the necessary pre-condition: a culture of frequent, candid evaluation. Those cultural practices are what make the evaluation process fair.

    In addition to having a fair process, the supervisor's daily evaluation work must address two areas. One is job performance. As far as possible, it is part of the supervisor's job to help subordinates develop.

    The other area is how the individual helps the team. Does he or she pitch in enthusiastically? Does he or she help others?

    If a supervisor does his or her job right, then performance evaluation can be a productive exercise even with a really stupid corporate system in place. But if the supervisor doesn't do his or her job, neither neat corporate form nor process will provide salvation.

     
     
     
    • Cherokee Brown
    • Certified Organizational Counselor/Coach, High Impact Consultiing, Abilene, Texas

    Some managers have been promoted into their position based on his or her percieved personality, and sometimes based on results or political relationships. All too often the reason the performance review issue is not viewed as a valuable management/employee tool is a lack of training. Having said that: What's to be done with the performance peview? Consider these factors.

    1. From a legal viewpoint be certain the performance review process is published and acknowledged by each employee.

    2. Be certain the performance review form is legally relevant in both performance and behavior. You can have an employee with great results (performance) but a bad attitude (behavior).

    3. Have a process by which that all those who have the responsibility of giving performance reviews are properly trained before being promoted. Human Resource personnel can usually do the training.

    4. The performance review process should not necessarily be a annual event. Some employees may need more frequent reviews with the objective of improvement, encouragement, and feedback.

    5. Performance reviews need not have a negative connotation. They can serve as a "well done" document.

    6. Performance reviews must be considered dynamic. In other words, the document is alive and will change. Sometimes in positive ways, sometimes in negative ways.

    7. Never rush a performance review. Set time aside for input and output by both participants.

    8. Make the event conversational in tone, not academic or confrontational. Invite questons, comments, ideas, thoughts. Document concisely what has been said during the event. This has legal rammifications.

    9. If you sense a confrontational event it might be prudent to invite a second person into the session. Try to have the employee approve the second person's attendance.

    10. Try to arrange the event at the employee's time and place by asking the employee when is it good for him or her.

    11. Above all---Be honest with the employee. No games, just straight, friendly discussion about his or her performance and behavior, and path and plans for future accomplishments/improvements. And an honest offer to help him or her reach the goals.

    12. Reach some agreement as to when the next "review" will occur. But stress to the employee that you are able and willing to chat anytime.

    So what's to be done with the performance review? Answer: Use it to your and the employee's benefit, but do not abuse it. It can serve you well if utilized by properly trained people. Conversely, it may come back to haunt you should an employee want to contest the performance reveiw.

     
     
     
    • E. Michael Johnson
    • CFO, Demat Group, UAE

    "Perhaps a more important issue is the objective of the review itself. Is it to weed out poor performers?"

    In my view, the performance review has an internal and external value to the enterprise. The inward value is to improve the productivity of the reviewee. The external value is when we are able to bid for a new employee in the market for the same position, with an expected value more than the internal/current incumbant in the balanced measure. This is almost like selling an asset and buying another with better expected value. We should scan the HR market to know what is the asset quality available or relevant, and compare that with our internal/existing human assets. Then we have an alternative to improving the productivity of the existing employee by review, training, and development.

    When the economy is growing and markets are bouyant, internal candidates may have less risk in getting more appropriate opportunities outside. I have seen that some colleagues become more productive in their next employment than in the previous ones, and their replacements more productive than the ones who left. This equation is a win-win for all parties. Hence I feel the objective of reviews should also link or balance the review with internal demand and supply and external supply available in the relevant market for the same position.

    To recognize the so-called A players? Yes. Also as a basis for relative valuation for new recruitments.

    To provide the basis for compensation decisions? Yes.

    To provide clues to future opportunity within the organization? Yes.

    To map out an individual plan for personal development? Yes. However, such a plan for personal development can be within the current enterprise or outside the current enterprise (next employer).

    In my opinion, we need to benchmark the existing employee to the current market and value, and find the incremental values in development, retention, replacements or swaps, etc. We need to connect and relate the review to the current market context for talent required for productive performance.

    Should less emphasis be placed on looking backward and more on how to improve future performance? I would say the performance review should be restricted to improve future relevant performance. Past performance history is of no value if the same cannot be linked to the productivity matrix for the next period. Hence, past performance without linking to the future should be avoided. This should be best compared with what is realistically available as productivity in the marginal prospective employee in the market. This can help us to value the pay to the existing employee or other relevant decisions. A replacement market factor is required to make the performance review more balanced.

     
     
     
    • Ulysses U. Pardey
    • Managing Director, Am-Tech, S.A. Panama, Rep. of Panama

    Should the process be renamed and redesigned as a "personal development review"?

    There is a chain of reactions within the existing evaluation process that we must be aware of. The evaluator is also evaluated. His own evaluation certainly influences how he is going to evaluate subordinates. The better he is evaluated, the better he could evaluate his own employees. The evaluation process should be free of conflicts of interest. Why should your own boss be the only one to evaluate you?

    We all can accept that no one can be his/her best 24/7. The evaluation process or the personal performance follow-up should be an opportunity to exercise leadership in order to lead people to a sustainable better performance; it should never be used to show superiority.

    Company employees, regardless of their positions, are professional athletes in the sense that we make a living out of our activity and we have to perform. I think that when employees know what their real jobs are, what is expected from them, and when they benefit from the proper training, and they know when the performance follow-ups are going to be, it could lead to better individual and team performances and therefore to more competitive and profitable companies.

    We must bear in mind that managing people's performance is a key success factor for profit growth.

     
     
     
    • Vijayaraghavan
    • Manager, Wipro

    The success of any performance appraisal is in its ability to capture the KRA (key result areas) in a balanced approach. Hence, setting a target which focuses in all parameters is essential.

     
     
     
    • Appolo Goma
    • Warehouse Manager, Oando Energy Services Ltd.

    I believe it's right for organisations to rank staff according to their performances, but this should not be used as a punitive measure to unjustly drop weaker performers even when they meet the organisation's minimum performance levels.

    Ranking should jointly identify the weaknesses of each individual and help in drawing out developement programmes for employees in order to improve their performance. There should be signed commitments both by the employee and the employers on actions required to improve performances and actions to be taken if there is no improvement within a specified period. That way, employees will realise that the employer is concerned with helping them improve and will reciprocate with more commitment to the work.

    Employees who fail to improve after efforts have been made can be justifiably asked to leave the organisation because no organisation is interested in keeping dead wood.

    The appraisal process should be seen more as a process that is set out to help employees improve on their performance.

     
     
     
    • John Inman
    • OD and Training Manager, Kah-Nee-Ta

    In a perfect world we would talk to each other. Simple, respectful, daily conversations. Have conversations about performance, goals, expectations, rewards, and recognition, and about individuals as people. If we all did this, appraisals would not be so traumatic for managers. I suspect that those who in this forum have indicated that they embrace performance appraisals also talk with their team members, not once a year but daily. I too do just that, continuously talk with my team members so they always know where they stand and where they can improve.

    With that said, I seem to remember, maybe someone here can quote the statistics, that 85 percent of managers do not discipline employees because they do not like confrontation. If that is the case, 85 percent of managers will always have a hard time with performance appraisals. If this is indeed the case, we cannot as managers and leaders simply expect that everyone will jump on the performance appraisal bandwagon. So what do we do?

    I like tools and processes to help managers focus on team members' development. We also might consider aligning the expectations of our managers with their rewards so that they are rewarded for and focus on the development of their people rather than solely on management tasks. Add coaching and training in performance appraisals and combine with processes and tools to help with the performance appraisal process and we just might help all managers become effective in the process.

    Forced ranking is quite another thing altogether. It is a tool and process so it does help facilitate the performance appraisal system. In a perfect world it would be unnecessary, I believe. I am uncomfortable with the process because it seems like a substitute for regular conversations: an easy way out. I have seen other performance appraisal tools and processes that are robust, easy to use, aligned with corporate goals and objectives, and effective without forced ranking. So for now I am a bit ambivalent about forced ranking.

    Untying financial increases from the performance appraisal is one way to create a less threatening environment for managers. Tie financial increases to enterprise and/or team performance with a component of personal performance. Tie to skill, competency, or education improvement. There are several ways to go about this. Probably a matrix approach would be best. Just as with executive compensation, if you reward only on one dimension, you will see all decisions skewed in that one direction. If the rewards are balanced and designed to drive fulfillment of the goals, objectives, values, and vision of the organization, the negative stress created by out-of-alignment expectations and rewards will be greatly reduced.

     
     
     
    • Anonymous

    I retired some five years ago from an international organization with over 10,000 staff and now run a small healthcare business with less than 10 staff.

    From these perspectives, my conclusion is that a formal performance review, whether individual or team, is a waste of time. In the international organization, the performance review was a forced annual event, very elaborate, and actively managed by each individual to portray himself/herself in the best light. I never found any evidence that the result was used either for salary adjustment or promotion. The superivsor knew, through day to day interaction with subordinates, who was "good" and "bad" and awarded salary increases on that basis. On the other hand, senior management awarded promotions on the basis of criteria like world geographical distribution, diversity, and uplisting of staff from their local or regional grouping. Suffice to say, there was little discontent with salary increases because everyone knew he/she got what he/she deserved, while promotions always caused general discontent in the organization.

    On the other hand, my small staff (including three physicians) at the healthcare clinic resented formal performance reviews. They expect me to know their respective contribution to be clinic and award rewards on that basis without the rigamarole of write-ups.

    The formal performance review of the international organization also did not help with getting rid of bad staff. The bad review and the resulting dialogue were always contentious and used as evidence by the staff, when eventually fired, that the supervisor "hated" him.

    My conclusion is that performance reviews should be eliminated. In its place, the span of control of supervisors should be limited to a manageable size so that they can have good knowledge of their staff as time passes. Whenever a new staff is assigned to the supervisor, the newcomer should be told what is expected and how things are expected to be done. Supervisors should counsel bad performance and arrange training where necessary. They should also praise good performance as often as necessary. They should also keep good, ongoing records about the performance of each staff member. They should be encouraged to recommend salary increases on the basis of their perspectives. Annually, the staff should be surveryed on whether their supervisor discussed their good/bad performance during the year, whether the supervisor encouraged training, and whether they would like to remain in the same unit.

    Whenever there is a promotion slot, senior management should encourage all supervisors to submit names for consideration, and committees rather than individuals should select from all names so submitted.

     
     
     
    • Kayode Odebiyi
    • Business Development Manager, Trojan Estates Limited

    Imagine if a soccer coach waited six months before giving the players feedback!

    The essence of coaching is an ongoing, daily progress plan that sets long term goals but has short term targets. Performance evaluations should be conducted in a like manner, whereby every individual understands their performance targets and are jointly tracking its improvement with the manager. At the end of the year, an overall review is done to check how the individual has performed on long term goals. At this point, the annual review would identify whether the individual's performance growth has delivered the required annual targets and whether there is promise that the individual's development could lead to superior performance over the next period, or not. In the event that the individual's development has not progressed as expected, as with soccer, the coach decides whether to place this person on a special improvement course or cut his losses and divert those energies to other promising and star performers who would benefit the team as a whole.

    Overall, though, performance reviews should not be as taxing as they appear to be now; they should be kept simple and clear. Everyone should be clear about the review's requirements and use. Ultimately, this procedure can benefit both the company and individual in the long run.

     
     
     
    • Margie Parikh
    • Lecturer, BK School of Business Mgt

    Recently I and the CEO of a company agreed to have a "continuous" performance review that comes close to the theoretical type of critical incident method of appraisal for his company. The reason was to eliminate memory-based assessment and utilize the recency of the event and its outcomes for accuracy. We have already put together 360-degree feedback. It has high approval and the support of the staff.

    I believe that feedback (post mortem) and direction for the future are two closely related verticals of a performance review and must be retained. Both can contribute immensely not just to individual learning, but also to organizational learning.

    I have not heard reports of any stakeholder perceiving the review process as distasteful. Yet to be meaningful, reviews must resonate with the enterprise strategy, and the culture of the unit should be in harmony with whatever the review is purporting to measure.

    However, when we want continuous feedback or appraisal, the issue of measuring comes up. How can we forge a tool that captures all the attributes of performance activity? Would it not be over-definition? How do we handle the unstructured and non-analyzable tasks? In the long run, would it not cause tunnel vision?

    I have still not found the final answers. There is also the question of time and fatigue. A detailed observation of relevant variables is required for any meaningful appraisal, but managers report that they run short of time and the detailed performance feedback or evaluation as an exercise causes fatigue. They must buy into the worth and value of the exercise.

     
     
     
    • Anonymous

    One key that is so often overlooked for performance reviews is training in how to prepare and conduct the reviews. If a company or agency believes they are necessary and accepts the considerable costs of doing them, then it only makes sense that the company takes comprehensive steps to ensure they are done correctly so they are effective.

    Supervisors who conduct performance reviews should receive education in the company's philosophy regarding reviews, guidance from senior management about their importance, and training in the procedures and necessary documentation, etc.

    To not train our supervisors properly only ensures an ineffective performance review program.

     
     
     
    • Geetha Krishnan

    Three key points: 1) Have a three-dimensional definition of objectives -- for the organization, employee, and manager. 2) Have a two-dimensional set of key result areas -- activity measures and outcome measures. 3) Dispense with a forced rating system for appraisals. Instead, define a "stars" and "drags" list for future planning.

     
     
     
    • Anonymous

    Anyone who thinks employees like performance reviews is not paying attention. After 45 years of partipating in this process, I see that it is something subordinates and managers hate. Tying it in to a forced ranking is just another foolish enhancement. Low performers should be counseled on an onging basis and either developed, redeployed, or dismissed. Shareholders should not allow managers to employ low performers and then wait for the annual performance review before taking action.

     
     
     
    • Scott Ward
    • VP/Chief Strategic Officer, Windings, Inc

    If performance reviews could answer all the questions and create all the desired results in an individual performance, then we could also create one metric to determine if an entire organization is successful. Since we don't, neither should we just use one tool (performance review) for multiple purposes.

     
     
     
    • Adelle A. Popolo
    • Management Consultant

    Every meeting a manager has with an employee should be a performance review. This is how both managers and employees develop and grow in their respective specialities. Annual reviews should be nothing more than a formalized record of those meetings, conversations and experiences, details of the accomplishments, and plans for future growth.

    Limiting reviews to an annual event means that you believe in retroactive, corrective action and/or reward. It builds distrust because it tends to be focused on visible accomplishments or transgressions and ignores the bulk of the work and contribution that an employees makes.

    And the notion of divorcing pay raises from performance reviews is akin to divorcing reward from recognition. You may be able to time the raise to happen at a time other than when you deliver the performance review, but they are and always will be linked in the mind of the employee.

    Managers need to stop being evasive about the fact that there is a limited budget and that the greater pay raises go the exceptional performers. All the scoring, ranking, and tiering is just a way to hide behind a process to sidestep the real reasons for which you are scoring the employees. I've seen too many managers tell employees that there is a company policy against giving the highest rating to any employee. Employees are not stupid, and making the process clear, open, and transparent, and being forthright, is what they expect and deserve.

    In conclusion, any and all suboptimal performance, outstanding performance, improvements, great ideas, or behaviors, both good and bad, must be dealt with when they occur. Be involved; recognize both accomplishments and coaching opportunities in the moment they present themselves. The performance review becomes a meeting about all of those discussions and the impact and changes that resulted. And more importantly, discuss the plan for moving forward, even if that plan means the employee needs to move forward by seeking employment elsewhere. It results in better business performance, good management practice, and happier, more productive employees.

     
     
     
    • Bo Carrington
    • Senior Consultant, The Hayes Group International, Inc.

    Performance evaluation is a must, but successful and meaningful evaluation requires a number of things, the first of which I have not seen mentioned yet:

    1) Integrity of the system - Many people have talked about the failings of performance review systems (and forced ranking) with detriments being internal politics, backstabbing, or gamesmanship. This has to be eliminated; doing so requires objective and meaningful measures that are specifically behavior-based. This also requires extreme commitment from the top, in other words, leadership.

    2) Leadership - A successful system has to be embraced as something other than "just something we do." Leaders have to walk the talk, and see, believe, and promote the true value of the system and set an example at each level of the organization.

    3) Alignment - Leaders and employees have to see the link between what is being evaluated and what is being measured and how it impacts the business.

    4) Appropriate Use - This can also tie to integrity in that the system has to be used appropriately. This is where a good forced ranking system can be introduced. It does not necessarily mean "rank & yank," but grouping employees into a forced distribution curve can be useful when planning developmental activities, compensation distribution, succession planning, etc....

    Communicating to an employee that they are in the middle or lower group (or upper group, for that matter) is done by default when using standardized measurement systems (Excellent, Good, Below Average, etc.). What is demoralizing and demotivating to an employee is not knowing they are in the bottom third or bottom 10 percent, but instead believing that all employees are considered to be at the same level of performance. (Everyone gets a ribbon.)

    5) Ease of Use - The practice has to be blended into everyday business and cannot be burdensome. If it gets in the way of achieving the results that are being measured, the system works against itself.

    The other four points are easy to achieve when compared to this last one. Out of the box thinking, technology, and sincere effort gained only through commitment are but three things that can help achieve this last point.

    To conclude, there are few theories surrounding performance management or evaluation that are blatantly wrong; however, there are many that fail to grasp or explain the concept as part of a holistic system. The reason is in part that this type of system is not integral to business success in the short-term (which is what we spend most of our time and effort measuring), but most definitely is mandatory for a business to achieve the height of excellence and sustained results created through the synergies of talented employees and fundamentally strong business processes and systems.

     
     
     
    • Henrique Ploger Abreu
    • Marketing Manager, JD

    The performance review should be linked to the vision and mission statement of every organization and embedded in its corporate culture. It shouldn't be based on analyzing last year's sales or general figures results, which often are mainly about managing numbers and expectations, but focused on the qualitative aspect of performance by analyzing which actions contributed the most to help the company achieve its main goals.

    A review also serves to identify individual gaps to be developed in every manager's pool of skills and competencies. So this process should be performed on a regular basis, at least four times a year, and with a very strong coaching component.

    The main asset for any company is the wealth of experience that every senior employee brings. If anyone is unable to pass along their knowledge by teaching, coaching, and mentoring young managers, then they have failed as leaders. Looking backward is important, but a stronger focus should be placed on building a measurable and accountable action plan for both performance and personal development targets.

    All leaders should see their role as motivating and inspiring followers to achieve common objectives. Ideally, we could call these reviews a personal leadership development plan.

     
     
     
    • Anonymous

    What's wrong with performance appraisals? In most companies, you're asking a single tool to work for thousands of employees in hundreds of situations, and then pretending that the results are truly comparable for purposes of granting pay raises and determining who are the "bottom 10 percent." A manager trying to prepare 10 to 20 of these at year-end is facing enormous pressure to somehow do the right thing in the absence of any real way to do it. That's why we hate them.

    If the performance appraisal were limited to an assessment of how the person did in the job this year, and what skills they need to do a good job next year, it would be a much easier task. Instead of determining a "bottom 10 percent," let's understand what the portfolio of work is that needs to be done, and what skills are needed to do that. Then let's let employees "bid" on those jobs based on their demonstrated skills. This way we're not passing judgement on the person, but rather saying, "Your skill set doesn't match our needs." Skills and needs change within organizations, but that shouldn't mean that we classify people as "poor performers" just to get people to move on.

     
     
     
    • Hany Derias
    • Branch Manager, ETI Professionals

    The one thing that performance evaluations should not be is a "surprise." This will take all the pressure off both the employee being reviewed and the manager conducting the review.

    I am a strong advocate of continuous feedback and communication with all team members so that at any given point everyone pretty much knows where they stand. In my opinion, it does not take much time once you get in the habit, and on the upside, it provides a very healthy work atmosphere in which no one is left wondering whether he/she is performing up to expectations. That also provides an ongoing gauge/opportunity for someone who may not be performing very well to either improve or understand why she/he is not a good fit.

     
     
     
    • Mehnaz Khan
    • Team Coordinator, Cambridge Solutions

    There is a great deal of pressure on managers to achieve a plethora of different things in a performance review meeting, such as providing feedback on performance and establishing training needs. However, all involved in the review should remain focused on the key goal, to sustain and support strong performance and turn around any poor performance.

    The best practices are:

    Conductng timely performance reviews. The best way to start a review is by asking the appraisee to come with a self-assessment document e.g. SWOT and an individual development plan.

    This enables each individual member of staff to record agreed-upon development activities to support performance and future career development.

    Performance management reviews are a part of different HRM issues that managers deal with. In order to support managers with this aspect of their role, the Human Resources Department should help by providing a set of appropriate tools and techniques.

    In the end it is important to recognise and accept that performance reviews will always have their challenges. Very few people enjoy the prospect of having their performance analysed, discussed, and documented.

    However, by preparing and structuring performance review meetings, as well as meeting regularly with direct reports, managers can help make this exercise more productive and less distasteful. This will directly help an organisation develop a positive feedback culture.

     
     
     
    • Lorre Zuppan
    • President, Branes, LLC

    As managers we often dread the performance appraisal process largely because it highlights our own failure to manage our most valuable resource to its full potential. Consequences for all team members are significant, and frequently a host of emotional and political factors are inevitably baked into a flawed process. If managers managed and evaluated well, forced ranking might be a good tool. Unfortunately, we do not live in a perfect world, and the ranking and appraisal process becomes counterproductive.

    When I took over a team in a large publicly-traded organization, I was told by my new manager that the team was not very good and I would likely need to replace them. Within a year (and no turnover) that team was rated by my manager and all of our peers as the most highly-performing out of all the teams in a 50,000+ group of the organization. The point is that those evaluating performance may not always have a complete view of what's going on, and assessment errors when combined with force ranking can cause irreparable damage to an organization.

    It's time we focused on proactively managing our most precious resource rather than executing the typical churn and burn.

     
     
     
    • Raymond Finger
    • Secretary for Personnel, The Salvation Army Australia

    What if we were to create work environments in which managers and supervisors knew how to manage and supervise people without the formality and stigma of the "performance review"?

    What if managers and supervisors provided appropriate feedback to staff as part of their normal daily dialogue? Is it possible that the evolution of performance management tools for use in the workplace has less to do with the performance of employees and more to do with the capacity of those managing employees to be able to provide appropriate feedback as a matter of course; and thus, might not the issue of remuneration resolve itself?

     
     
     
    • Phil Clark
    • President, Clark & Associates

    Great discussion! Age old problem. I have learned over the years that performance reviews reflect more about the organization than the people who work there. It facinates me how organizations will go through elaborate hoops to avoid having heart-to-heart discussions about how people work, live, and function within an organization. What I have seen is those with the most structured and distant process achieve the least. Turnover, disatisfaction, lack of creativity and lack of energy in the workplace tend to go hand in hand with inadequate feedback and concern from the leaders. It's about people...not paper.

     
     
     
    • Anonymous

    Forced ranking works perfectly well when all employees being compared are performing the exact same work, using the same tools (machine version or technology) etc. When employees doing very different things are forced rank against their colleagues in different divisions, what is accomplished? The more variability that exists in roles and responsibilities, the less useful an across the board application of forced ranking becomes.

    I just left a large global bank that continues to shove this inane process down the protesting throats of its managers. In an enterprise where many different divisions contribute to a firmwide bottom line there is little if any tangible correlation identified between an employee's specific, measurable contribution/performance and the relative success of the immediate business line he/she supports. So, one could have a great year supporting a record breaking revenue line and still end up doing poorly on a relative ranking basis. This of course is nonsensical as it stands to reason that any firm would seek to position its...best...performers alongside its most profitable and competitive leadership segments.

    Moreover, while board level management was espousing "principles" and "EQ" as being compelling factors in determining performance (read compensation), managers in the line were ignoring these elements completely. It was discouraging, illogical, and worst of all...apparently not open for discussion. That left thinking people to conclude it reall was just "rank and yank" no matter what we were told.

    Taking a global bank (with multiple divisions extending into corporate, investment, private and retail banking etc) its obvious that not every job or function is as important as the next.

    This is at the heart of the issue. Managers failed to qualitatively and quantitatively distinguish the criticality and contribution levels of different roles across the firm. If managers can't/won't do that, which is the hard work, the rest of the exercise is really about how quickly they can get their own managers to horse-trade people on the performance ladder.

    The end result...a devolvement into popularity contests, a forum for favoritism and favors granted and rendering of otherwise unique and distinct performers into a muddle of sameness. Good riddance...

     
     
     
    • Reo Hamel
    • President, Reo Hamel Associates, Inc.

    Many good observations/comments made re: Performance Evaluations. My 30+ years Industry and Consulting experience has consistently shown that:

    1. Managers, increasingly, don't have (or make) the time to communicate continuous feedback to employees and dread having to sum it up in annual/semi-annual reviews.

    2. Most companies don't reward (expect Managerial competence) managers for good work in their annual evaluations of employees and, in fact, except for HR deadlines, senior management doesn't really pay attention to it. Why should managers, except those really good ones who understand the importance of positive and negative feedback, give quality time to it?

    3. Many employees experience negative feedback ONLY during these evaluations.

    4. Senior management in most companies need to understand how their strategic commitment to ongoing and fFormal performance evalauations can result in keeping key employees and developing other employees into key contributors.

     
     
     
    • Betsy Olinger
    • Business Coach, Marketing-U

    Imagine playing the kids game Marco Polo without any one ever responding "Polo". This is the game we play at work when we rely on solely on annual performance reviews to change performance.

    It's preferable to have an ongoing performace discussion with specific action items, deliverables, and dates. If the purpose is to weed out the fat, continue to do only annual reviews. If the purpose is to grow your leadership, measure and tend to your leaders more often.

     
     
     
    • Eva Benita A. Tuzon
    • Programme Officer-Research, CIRDAP

    Performance reviews are supposedly to be used as a guidepost in decision-making processes with the aim of improving competitiveness at the individual and organizational levels. The most critical issue pertains with the value system of individuals and the organization itself.

    If performance reviews are done simply out of public display or "routine" and never draw out the best within a person or excellent results collectively, then these reviews only leave marks of discontentment, hypocrisy, dishonesty, and at times they push people to attain the highest level of inefficiency.

    Performance reviews should be undertaken internally and then reviewed by an independent external body [the third eye] so as to purify the polluted, corrupted performance ratings or assessments.

     
     
     
    • Scott Elder
    • Manager HR, Hastings Health Unit

    Having spent ten years as a compensation management consultant, five as an operations manager for a multinational and five as an HR manager I have seen all sides to poor performance systems. Most often the problem is not the review itself but systemic conflicts between performance management/reward philosophy and execution.

    The system, in whatever form, must do many things effectively and simultaneously:

    1) Be timely: behaviour modification theory, the root of performance, shows reward must follow effort and corrective feedback must match inappropriate behaviour in a timely manner. So why are reviews semiannually at best?

    2) Be quantitative: Six Sigma and ISO show any task or process can be measured, yet the majority of reviews are still qualitative. Measure the task, measure the person. Only attitudinal factors need be qualitative and many of those can be found in behavioural interviewing theory.

    3) Be flexible: A company can restructure, implement new products or enter new markets in three months. So why do performance goals change....never? It is the most common trap for the manager. Reinforce a new direction but measure and reward old, irrelevant personal goals.

    4) Be accurate: A common labour relations nightmare is a disciplinable offense, anecdotal (hearsay) evidence of patterned bad behaviour and five years of documented walk-on-water evaluations. For labour professionals no review is better than the common false positive.

    5) Be fair: Managers, like most people hate, being personally judgemental so only the trouble maker and the superstar are differentiated. Everyone else is lumped into "OK". Yet that is the task, to differentiate. Managers need proper training in this task like any other.

    So what has worked? Coming from a logistics company where 99.5% measured daily was the norm, many things can work if imbedded in the culture:

    1) Self-reporting quantiative measures. Link the MIS/Six Sigma directly to the review/reward mechanism on a daily, weekly, and monthly basis.

    2) Do like the teachers do. A finished report, presentation, or project gets graded. Every consulting presentation I ever made for eight years was debriefed and graded.

    3) Make observation and recording part of the manager's routine. A calendar for each employee requiring an entry, good or bad, semiweekly becomes second nature to the manager and at the end of the year shows a pattern of behaviour. A labour lawyer's dream.

    4) Link the measure directly to the strategy. Changes to marketing, engineering, or QA directions automatically trigger a review of performance goals.

    As managers, let's be honest. We have little faith in the outcome so we don't do the process. Forced distribution tweaks the process. Train us, make it relevant, and then we will make it work.

     
     
     
    • Aniruddha M. Godbole
    • Executive Assistant, A.V.Rajwade & Co., Mumbai

    Lord Kelvin said that if one cannot measure then one may know something not at a level which may be called scientific. There should not be any doubt that performance needs to be measured.

    There is a need for the reviewed person to get a periodic feedback; however a full-fledged performance review may be meaningless in an R&D assignment if done too frequently. Performance reviews too often focus on efficiency and arguably efficiency and innovation do not go together.

    In order to measure we must have an outcome to measure. The problem is particularly acute in the area of R&D where failures occur more often than success. Thus, we must at times even look at quality of failures!

    So, its tough to measure and it must be done with full commitment. Performance measurement is a relative measurement. As long as the same person or team reviews different people, the measurements are comparable. However, when different people measure performance the measurements are NOT comparable. And this is the problem with most firms, which use reviews for comparing employees as though performance measurement is on a uniform scale. Also, there is no need to compare employees across a uniform scale when all units work within an organization like truly independent units.

    Try comparing the performance of two employees or teams who have both failed both on the main objective and on different cutting-edge research projects!

     
     
     
    • Flavius Chircu
    • Consultant, CREIRE

    I would start by saying that measure-improve-reward should be a virtuous cycle in any organization. Internally, such process ensures learning, whereas externally it makes for more satisfied customers. Thus organizational introspection, of which the employee performance review is part of, is a condition for success.

    Organizations run into problems when particular implementations of such cycle, however successful they are, are being adopted without even being adapted to the goals or circumstances at hand. Ideally, a company would start by looking at what/why it has to improve, continue by enabling change, and only finally by measuring and rewarding.

    Such analysis is likely to reveal different approaches depending on the size of the organization, its culture and history, etc. In other words, different reviews are required for different performances.

     
     
     
    • M. Khalil Hasan
    • Partner, thk-PEARL Int'l Management Consultants

    The articles really touches a subject that is critical to the performance of the organization it self.

    I believe all the objectives of a performance review are relevant. Force ranking kills the team spirit in an organization. As indicated in the article, the best thing is to have an on going scoring and feedback mechanism. In case of complex and long-term goals, there is need to set milestones to evaluate performance instead of waiting for an ultimate result.

    Afterall the entire goal setting itself may be faulty at times and would require revision while reviewing performance.

     
     
     
    • Akram Boutros, MD
    • Executive Vice President, COO & CMO, South Nassau Hospital

    I see performance appraisals as structured feedback sessions that promote focused long term and short term development. They should not be tied to increments or promotions. These depend on meeting objective metrics and suitability of adavancement, respectively.

    I have just designed an annual performance appraisal that the manager must access regularly. It focuses on twelve leadership traits. For each they input experiences and observations as events occur. This way the reviewer does not have to rely on memory or how they feel about the employee's most temporal performance.

    On a seperate sheet are the metrics that are used for increments and bonuses. See, an indivual can reach all their goals, while destroying a culture. They are distinct skills.

    I perfer a minimum of quarterly feedback sessions on development and monthly assesesment of objective metrics.

     
     
     
    • Ann MacCann
    • Senior Quality and Standards, Centre for Learning Innovation

    In my experience, when an employer carrying out the performance review is interested in the employee, and a relationship of trust and respect exists, then the performance review can be a very positive one.

    I prefer to let the employee know well ahead of time, giving a structure that the review will take, with a proforma of issues for discussion.

    As a reviewee, I prefer to speak first, dealing with those achievements I have some pride in, and addressing those areas for improvement through training coruses, mentoring, or other possibilities.

    It helps if the organisation's goals, strategies, and vision are well known and publicised! I appreciate constructive comments about improvements as well.

     
     
     
    • Oden A Hughes
    • Manager, Analytical Development

    As a manager and employee, I find that there are two distinct purposes behind any performance review plan.

    1. As an employee I want to know how I am doing? What do I well and what do I need to work on? How does my work fit in with departmental and company goals, and what are the plans for my future? This process should engage and energize me. By providing criticism and praise, summarize progress towards goals, and assess individual growth within positions, my place in the work world is clarified.

    2. As a manager I want to know where my resources are, how people are performing to scale so I am able to make defensible staffing decisions regarding promotions, raises, transfers, terminations, and workforce reductions. I use performance reviews as a health check for my organization-- are we under- or perhaps over-performing when compared to the rest of the department or company? As a group did we provide a valuable resource to the company? How might we be better utilized in the coming year?

    Neither purpose is mutually exclusive and in some review systems they can in fact coexist harmoniously. Unfortunately, in many cases this does not happen. We end up with scales that the employees find laughably arbitrary or worse perhaps no scale at all, only the manager's dubious opining in short essay form.

    I believe, though, that both purposes are equally important and should be done concurrently but separately. To that end I have instituted an informal, well documented coaching plan while I continue to utilize my company's formal scale-based yearly review system. This gives me the flexibility to establish goals and milestones, working with my employees to fully invest them in their performance while at the same time completing a yearly summary to fulfill the needs of upper management.

    You can serve two masters...

     
     
     
    • John Chapman
    • HRM Consultant, JKC Consulting Ltd

    In my experience there are five practical problems with performance appraisal in organisations. 1. It tends to be a purely backward looking process focusing on what has happened rather than also looking to the future and to the challenges lying ahead.

    1. It is too often closely linked to salary review. Obviously there should be a link between performance and reward, but it is difficult to achieve open and honest discussion if salary is on the line. Who wants to admit to failings at a time like this?

    2. Linked to 2 above, it often focuses on the negative aspects. Managers may feel that praise for good results could result in greater expectations for salary increase.

    3. The basis for evaluation is sometimes tenuous. Not all achievements can be easily quantified, and many aspects of good (or bad) performance may be easy to recognise, but difficult to specify.

    4. As John Donne wrote, "No man is an island." Our results rarely depend purely on our own efforts. In most modern organisations achievements are the result of effective teamwork, and are often better recognised and rewarded as such.

     
     
     
    • meenalochani
    • Organizational Consultant

    It is critical for today's managers and leaders to view the review process in a holistic way that encompasses employee development through various people initiatives, building trust in employees in the entire review process and ALSO focus on compensation--in that order.

    Some realities:

    1. Performance reviews are slowly losing their charm in most organizations especially where clarity in process, process flow, and execution are taking a hot seat only towards the end of the review cycles.

    2. Employees are either unaware about setting their objectives in the beginning of the review period or are not guided well enough in the goal setting process.

    3. In many places, goal setting itself acts as a bottleneck for performance when it acts in a way so as to completely compartmentalise performance and not allow employees to see beyond these written goals

    4. Performance reviews are experiencing a tangential tear in the eyes of the manager and the employee in most cases.

    5. Personal branding and articulation of self during reviews also skew the entire exercise, which is supposedly to be non-judgemental.

    6. To cap all the above, role clarity for an employee may be missing in small and medium organizations where the employee is expected to be multiskilled and wear many hats based on the immediate need of the organization.

    7. Lack of well-thought-through metrices also add to the chaos.

    8. Performance reviews still remain subjective most often and objective reviews are far and few.

    Some solutions:

    1. Narrow down roles and set tangible objectives. It is better to enable the employee to reach the lesser number of defined objectives.

    2. Do not complicate the review process.

    3. Separate compensation and performance reviews and discipline managers to consider mid year reviews seriously.

    4. The focus should be not to have a vast range of increments and keep the increment band narrow, clear and logical.

    5. During reviews, focus on the "mid range performers"- the performers who fall in between the STAR and the non performers.They are the ones who are hardly observed in most organizations and taken for granted. It is they who however run the hardest.

    6. Reviews should focus on building competencies and skills for the organization rather than only focusing on compensation/increments.

    7. Reviews should help the organization focus on talent management, succession planning, and gearing up for attrition.

    8. Reviews should be an Employer Value Add for the employee with ample opportunities for mentoring and coaching.

    9. People Function department should target at building a culture where year-long performance is recorded and not one-off instances for reviews.

    10. A culture of performance reviews that focuses employee development will automatically make this a pleasant experience for both employers and employees.

    11. Why not focus on instant-reward points that keep adding to the employee's kitty as and when he shows achievments in his work sphere. These points could act as a basis for an annual increment!

    If we are discussing this so much, we also need to figure out a way of disciplined reviews, be it the flow, meetings, target setting, recording achievements or reward systems.

    Else, this will remain an eternal topic for debate!

     
     
     
    • Deepak Chauhan
    • Consultant

    In my perspective, the process of performance reviews should be as transparent as much as possible. Targets should be define and made clear to each employee from the organisation's standpoint. The target should also be realistic. That will help in developing an accurate matrix. The approach should be flexible and data-driven.

    When we are done with the above then we can do a fair and much more accurate evaluation in terms of ranking.

     
     
     
    • Vaneet Gupta
    • Manager (Human Resources), Steel Strips Wheels Ltd

    The managers who carry out these reviews need to be trained to facilitate this process. The technique of appreciative inquiry (AI) is being used to facilitate this process. I am fascinated by the power of this process and am hopeful that if organization-wide initiatives of training people in AI are used, the organization can go beyond achieving organizational goals. This process transforms the organization into an institution, one which facilitates the evolution of individuals, society, and civilization.

     
     
     
    • David Physick
    • Principal Consultant, Glowinkowski International

    Wow, what a hot and frantic topic. I'm in England and was born and worked for many years in Liverpool, where football (soccer) is a passion. There are no qualms about applying forced rankings by fans who want to drop players who have a bad game. Perhaps this is an easy call because there is a clear line of sight between corporate or team objectives and individual contribution, forwards score, defenders defend, to be simplistic.

    Within organisations, be they commercial or otherwise, there is often not such clarity. Without it, any performance management system is going to be frail and cause "heartburn" as many commentators have suggested. So conduct the business planning in as inclusive a way as possible (the folk dealing with the customers know more than anyone about the market), set clearly aligned goals, and allow people to get on and do. (Was it Patton who said leadership is about explaining the what but not telling the how?). Build a well-defined behavioural competency framework and, in so doing, remember competencies are behaviours (see Richard Boyatzis) relating to how leaders think, influence others, achieve and manage themselves. Regularly check in on how things are going. A once-a-year review is too late to do anything about off-track performance.

     
     
     
    • Rohan Lobo
    • Assistant Manager, KPMG

    Evaluating performance is a natural consequence of any organized action. It is even a basic tenet of democracy wherein elected representatives are evaluated by their constituency. Hence to discard evaluating performance in any organized body of activity is unthinkable.

    The basic tenet of any election is that it must be a free and fair process representative of the majority of the constituency. The reasons why performance evaluations in organizations are distasteful are fundamentally two in nature:

    Performance evaluation is not free and fair and representative of the actual performance as perceived by the evaluatee.

    Evaluatee simply does not have the maturity to accept a free, fair and just evaluation of performance.

    In both instances distrust of company management and the evaluator's true intention leads to the gap in the perception of actual performance vis-a-vis targets.

    Companies focused on harnessing the power of employees at all levels to enhance organizational performance may consider utilizing the Balanced Scorecard technique in setting meaningful goals and consistent evaluation criteria for each employee.

    A balanced view of an employee's performance vis-a-vis all 4 quadrants in the Balanced Scorecard recognizes all aspects of conduct of work. Further, a broader perspective enables a greater humanness in recognizing performance of an employee while providing a more balanced and meaningful path to identify key focus areas going forward.

     
     
     
    • Gaurav Goel
    • Project Manager, Infosys Technologies

    I think that the mantra is pre-defined performance measures, objective parameters, a uniform process across the organization, and continuous feedback throughout the year. If managers can eliminate the element of surprise during the performance reviews, then the whole process will be more effective in improving overall performance of organizations.