When Updated, Performance Appraisals Remain a Viable Tool

Is the individual performance appraisal tool on its way out?

Judging by the headlines over the past year, many major business publications would have you to think so. But, as it turns out, the headlines don’t quite tell the whole story.

While at the Talent Management Alliance’s (TMA’s) sixth annual summit on Assessing and Developing Potential and Performance in Chicago earlier this summer, I attended presentations from several major companies – General Electric, Gap, Pfizer and Deloitte, among them.

From the titles of those talks (one was called “Blowing Up the Traditional Performance Review”), I assumed the focus would be on the demise of performance management.

Performance appraisals are one of those things that everyone, whether you deliver them or receive them, loves to hate. Many years ago, I had the “opportunity” to improve upon a one-page, check-the-box form that measured only 5-10 characteristics. It only looked back over the past year – did not look forward for the next 12 months – and included an overall rating.

The general consensus was that the form opened up the potential for reviewer bias, since that reviewer could structure responses to come up with whatever rating he or she wanted for an employee. Simply put, it was very subjective, indeed.

The new system I helped create would be applied to 40,000 employees – from individual contributor to senior manager – and involved several different business units.

After much discussion with a sample group of 500 employees, we agreed to:

  • A system that would evaluate and rate performance for the last 12 months using a five-point scale.
  • Equal focus on the past 12 months and the coming 12 months, putting half the attention on how someone could develop moving forward.
  • Introduce competencies for four levels of employees, from individual contributor through senior manager. The competencies for each level also had three to five behavioral descriptions of what someone doing this well would do.
  • A 12-month pilot program of the new system with 500 people. This was very helpful, as we learned that supervisors wanted to focus on development of employees but didn’t know how to do so.
  • Tools and training on how supervisors can develop employees “on the job”.
  • Provide training for people receiving reviews on what their role should be. The idea was that they must be responsible for at least 50 percent of their own development.

You may be wondering, how was it received?  Supervisors and those being reviewed all considered it to be a vast improvement. A lot of development discussions were taking place, and employees receiving reviews now understood what they needed to do to improve, thanks to the behavioral descriptions within the competencies.

Was it a perfect system? Nope.

Some supervisors still did not conduct reviews, so employees who were not performing were not aware their performance was an issue. I know of no system that provides for what I call “managerial courage”. If there are no consequences for not conducting reviews or dealing with sub-standard performance, then the system will be seen as flawed.

Back to what I learned at the TMA conference in Chicago. The newer iteration of performance management does not focus on the negative but rather: “Here is what you did well, and why” and “Consider this in the future,” or “You might want to think about doing this going forward, in addition to what you are already doing”. Pfizer actually spent a lot of time and energy redefining “feedback” – what it is and what it isn’t – and their definition focused exclusively on positivity.

While I continue to have my concerns about the non-performers, I agree the system should be built for the 99 percent of the population, not the one percent. And the best way to ensure performance management systems remain fresh is to change it up at least every five years.

David Hoff is the chief operation officer and executive vice president for leadership development at EASI•Consult®. EASI•Consult® works with Fortune 500 companies, government agencies, and mid-sized corporations to provide customized Talent Management solutions. EASI•Consult® specialties include individual assessment, online employment testing, survey research, competency modeling, leadership development, executive coaching, 360-degree feedback, online structured interviews, and EEO hiring compliance. The company is a leader in the field of providing accurate information about people through professional assessment. To learn more about EASI•Consult®, visit www.easiconsult.com, email ContactUs@easiconsult.com or call 800.922.EASI.

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