Guest Post: How to Blow Up Your Employee Evaluation Process

February 27, 2010 22 Comments

My guest post today is from Dr. Todd Dewett. Todd is Professor of Management at Wright State University. Todd also blogs at his own website, Fuel For Leaders.   I am very honored to share Todd’s thoughts with you! Here is an excerpt from Todd’s bio, followed by his article:

I have consulted in over fifty cities across several countries. I have worked for Fortune 500 firms and startups, product companies and service companies, private companies and government agencies, in maquiladoras and executive suites. Before going it alone I was fortunate to enjoy positions at Andersen Consulting (now Accenture) as well as Ernst & Young. I now spend my time fighting hard to change the world one cubicle at a time!

In the past, via many blogs and interactions with client organizations, I
have encouraged those in positions of leadership to blow up their employee
evaluation process.  Speaking as an expert who has been in many
organizations:  the vast majority of evaluation systems are too
bureaucratic, take up too much time, are too costly, are not taken seriously
by some, are abused by others, and are actually loved by a tiny minority.
The current system can be replaced by frequent, brief informal performance
chats.  Far less documentation should be required.  Lots should be spent
training people on the basics of effective professional communication
(though the cost will be trivial compared supporting the current bloated
evaluation process).

This is a small follow up to what I’ve said before.  Such statements always
create great conversation and stir up a few emotions.  I said something
similar to this to some HR folks recently.  One person really wanted to talk
about how this could be accomplished.  It won’t be easy – changing a large
bureaucratic system is NEVER easy.  But it can be done if brave leaders step
forward to guide the process.  Here is a quick take on how to get started.

1.  Espouse what matters.  Tell the troops:  “We care about people and about
improving performance.  An evaluation process is supposed to help more than
it hurts and that is our goal.  Thus the old monstrous system will cease,
following the latest round of evaluations.”  The entire leadership team must
be consistent in message and use all the big microphones available to get
the message out (speeches, meetings, emails, intranets, wikis, phone blasts,
etc.).

2.  Make them believe it.  If you assert that you intend to make a large
systemic change you need to back it up with emotion-filled comments and
behaviors.  Start by making a well publicized and documented effort to kill
the current system.  Hold a funeral, burn a massive pile of evals in the
parking lot and roast hot dogs – get creative.  Use the pictures and video
through the best communication channels to reinforce the message.  Next,
everyone in the leadership structure has to be held accountable for adopting
the new behaviors.  Leader modeled behaviors are stronger than any eval
process for shaping the behaviors of others.

3.  Train (and mentor / coach) on the fundamentals of effective professional
communication.
This includes the characteristics of effective communication
(e.g., timely, honest, brief, positive), effective listening, etc.  I am not
referring to simple computer-based training.  They need to improve these
skills by working with other human beings – there is no substitute when it
comes to soft skills.  If you really want to show employees how important
effective communication is, add effective communication to topics covered in
the new evaluation system.

4.  Train them to provide productive performance discussions.  Effective
performance discussions must:  be delivered at the right time, in the right
physical space, by the right person; be framed constructively, be
accompanied by helpful advice and / or resources.  Not understanding the
details of each of these or missing one or more of these key elements can
lead to conflict instead of a needed performance boost.

In short, I simply refuse to believe that adults will always be uneasy,
unhappy, or angry when discussing their job performance – which is often the
case now.  The two main problems are the massive pressure-filled systems we
create to evaluate people and the fact that most professionals are not as
skilled as they should be at productively discussing individual performance
issues.  If you have the power, please seriously consider simplifying yours
and then use some of the savings to better train everyone to be world class
communicators!

Thanks, Todd!

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Comments (22)

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  1. Paul Hebert says:

    Wonderful to see Prof from my alma mater (class of 83 – that’s dating myself.)

    Your post highlights all the things that go wrong with performance reviews and also highlights the fact that we, consciously or not, assume performance is a fairly static thing. In other words, what I did to get a good performance rating 6 months ago is still valid. Unfortunately the business world is changing faster than that. What is good performance yesterday could be poor performance tomorrow.

    We need a system that keeps up with the environment in which we perform. We don’t teach children to walk by waiting until they are a year old and then review their performance and wait another year to see if they are walking – we work them regularly as their skills and strength adapt and grow.

    We need to look at performance as a long, long, long, series of adaptations to business and provide the coaching and guidance needed to achieve ongoing, competent performance. If we’re doing it right – there really should be no end of the process – things will continue to change.

    Great post and thanks for representing WSU so well.

    [Reply]

    Bret L. Simmons Reply:

    These are great points, Paul. Our static PA systems just don’t do the job they need to do. We need some real metanoia about PA. Thanks for sharing! Bret

    [Reply]

    Paul Hebert Reply:

    okay metanoia – had to look it up – and yes we do! Expect to see that pop up on a post someday!

    [Reply]

  2. Bruce Lynn says:

    Nice post..about ‘coaching’ Unfortunately, it is a not good post about ‘performance reviews’. A (proper) performance review is about tallying up the ‘performance’ against set business objectives in order to determine rewards (eg. promotions, raises, bonuses) from a finite pool of those rewards.

    The ‘bureaucracy’ that you belittle are essential to ensure objectivity, fairness, and protection against lawsuits. Yes, the ‘bureaucracy’ does little to actually enhance performance, but that is not its primary purpose. The primary purpose of a ‘performance review’ is to assess performance and the rewards associated with that performance. The secondary purpose is to leverage that moment of truth to be a positive learning experience and to motivate stronger performance (either out of fear of missing rewards or greed to get more).

    Yes, the process is ‘pressure filled’, but that is not because of faulty ‘systems’ or ‘skills’ shortages. It is because (a) an employee’s ego is on the line, and (b) an employee’s rewards are on the line. In the real world, these are sensitive, difficult areas. The notion that these issues can be addressed with ‘frequent, brief informal performance chats’ is absurd and dangerous.

    It is dangerous because I find that companies who have ‘informal’ performance review processes do so because they mask immaturity and disfunction in the performance measurement and reward process. Usually, such companies are rife with inequality, unfairness and political arbitrariness determining who gets the rewards.

    [Reply]

    Bret L. Simmons Reply:

    Welcome, Bruce! I can’t speak for Todd, but I have been in several performance systems with world-class organizations in my three decades of work, and each and every one of them has been a charade. The fallacy is that you can improve a faulty system, and I don’t believe that to be true. Objectivity? Fairness? With all do respect, that’s B.S. Any system, including the one Todd suggests, will be subjective and open to bias because as you know, the manager’s ego and job are also on the line. No easy answers. Thanks for sharing your thoughts, Bruce!! Bret

    [Reply]

  3. Bruce Lynn says:

    I’m not saying all ‘performance reviews’ have ‘objectivity’ and ‘fairness’. I am saying that the critisized ‘bureaucratic stuff’ is there to try to achieve ‘objectivity’ and ‘fairness’ in the good ones. A bad performance review system is a bad performance review system, but that does not mean that the ‘concept’ of having a performance review system is bad. That is throwing the baby out with the bathh water. If you have a bad performance review system, then fi the darn system…don’t throw it out. A good performance review system, with its attendant bureaucracy, is a heck of a lot better than an ‘informal chat’ for achieving objectivity and fairness (though an informal chat is better for ‘coaching’). That ‘bureaucratic’ stuff that I am defending is stuff like SMART (Specific-Measurable-Achievable-Realistic-TimeDelimited) objectives, measurement systems for the objectives, rules for sharing out rewards according to performance against objectives, rules for resolving disputes and ambiguities, processes for escalation and mediation. All very boring bureaucratic stuff. But essential to good performance management for what performance management was meant for…management. Not performance ‘enhancement’. That is a different thing.

    [Reply]

    Bret L. Simmons Reply:

    Welcome back, Bruce! I like your response, even though I continue to loathe PA. I still like the idea of throwing out traditional PA, but I’m a big Deming disciple. Even if we do throw out PA and replace it with something else, I do concur with you that the replacement must be clear and consistent in order to be fair. I do think we need a system, but I don’t think it has to be our current one. Great thoughts – thanks for sharing, Bruce! Bret

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  4. Bruce Lynn says:

    This issue of PA is derivative of a central issue in my outlook on business (Dynamic Work). Essentially, business is moving away from an industrial, 20th century model of fixed production lines and roles where even white collar workers work in office park white collar factories. Business is moving to a more flexible model where people work in a range of times, places, roles and commercial relationships with ‘employers’. This shift is the biggest business shift of the current decade. By 2020, the majority of office work will be worked outside the office.

    Fundamental to this aproach is management-by-objective or management-by-outcome. Basically, the business doesn’t care what you do (activity-wise) or how you do it as long as you achieve the desired or contracted outcome or deliverable for the business by a set deadline. It essentially follows that you need a sharp measuring system to make sure that deliverables are delivered, to assess their quality, etc. and share out rewards according to the contract. You need a good PA system.

    I guess you can get away without PA and have ‘informal chats’ if you have a nice steady operation where people just show up and do very routine things every day. As long as they put in their work day and get their assigned tasks done, then they get to keep their predefined job with its predefined rewards. I don’t think those types of work environments are going to exist for long.

    I would argue that a poor PA is the symptom, not the disease. The disease is poor management of the company. Where roles are static, empowerment constricted and performance routine. That environment has no need for PA because performance has little room for variation. In those cases, I’m sure the PA is a mess and a sham.

    [Reply]

    Bret L. Simmons Reply:

    Concur that poor PA is a symptom. I think it is a symptom of not understanding the nature of variation of performance. I do believe that performance is *normally* distributed, but the shape of that distribution is not driven by individual effort. When/if you realize that the distribution is driven primarily by systemic factors beyond the control of the employee, you realize that PA is folly.

    [Reply]

  5. Bruce Lynn says:

    Wow, I couldn’t disagree more with the statement ‘distribution is driven primarily by systemic factors beyond the control of the employee’.

    Just out of curiosity, have you ever managed a group of people. A sports team? A manufacturing line? A call centre? A sales team? I’ve managed those and more. Where the person lies on the distribution curve was 70% (not always though) of the time (a) determined by the individual, and (b) quite objectively measurable in their performance output.

    Are you honestly saying that a sports coach shouldn’t use a stop watch and score sheet? That a line supervisor shouldn’t look at output productivity reports? That a sales manager shouldn’t look at territory reports?

    [Reply]

    Bret L. Simmons Reply:

    with all due respect, Bruce, we don’t manage sports teams, we manage organizations. And yes, I have managed people and still do every semester manage the performance of people. In a subject evaluation environment, I know that it is decisions I make much more than decisions they make that determine the final distribution of performance. And I still WORK for an organization and am evaluated every year. I know it is decisions the organization makes (e.g. only ONE 5) more than decisions I make that effect my final performance evaluation numbers. And just BTW, I’ve worked in sales too and have strong opinions beyond the length of this comment that don’t change one bit my comment.

    Are you familiar with the principles behind SPC? If not, then no need to pay attention to anything I’ve said. Thanks!! Bret

    [Reply]

  6. Susan Mazza says:

    I do think the PA system needs a major overhaul, starting not with the process itself but with rethinking the purpose, the approach and the ability to execute effectively, not only once a year but every day.

    The current PA systems seem to encourage people to create and play a “game” in which they can exceed expectations and get the maximum financial return, rather than encourage people to stretch, make decisions in the best interest of the enterprise, or to take risks and even fail on occasion. And the less clear and measurable the results the more skill it takes to set the standards for assessing performance and provide meaningful feedback so ultimately both the enterprise and the individual win.

    Although I would agree with Bruce that this is really at it’s most fundamental level a management issue, and the overly bureaucratic, dysfunctional PA process is a symptom.

    People have a propensity to think and manage in terms of activities rather than based on outcomes. I would go so far as to say that the skill of outcome based thinking and management is alarmingly weak in many organizations. Not all goals can be stated in the simple concrete terms available in the industrial age nor can contribution be measured purely in those terms for many white collar jobs. So the default is often to define objectives in terms of activities (the things we can most clearly and easily define and see) or deliverables (the product of a series of activities). The problem is the assumption that if you execute these activities they may or may not ultimately “add up” to producing the desired results no matter how much hard work or skill they take to execute. I have seen this lead to many performance reviews turning into a nightmare for both parties.

    [Reply]

    Bret L. Simmons Reply:

    Welcome, Susan! After 30 short years of evaluating and being evaluated, I alas am not so optimistic that a major overhaul will work. You are SO correct about PA being a game. Love your thoughts in the last paragraph. do you have examples of firms doing what you recommend well? Thanks!! Bret

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  7. Wally Bock says:

    Bruce

    You say: “the critisized ‘bureaucratic stuff’ is there to try to achieve ‘objectivity’ and ‘fairness’ in the good ones.” That’s true. Bureaucracy originally was a management innovation designed to do just that. The question is: “Does it do that or does it need reworking?”

    I would suggest that the practice in most companies today is neither fair nor perceived as fair. If that’s right and the people in those companies are both intelligent and have good objectives, then the problem lies in the system.

    You say “The primary purpose of a ‘performance review’ is to assess performance and the rewards associated with that performance. The secondary purpose is to leverage that moment of truth to be a positive learning experience and to motivate stronger performance (either out of fear of missing rewards or greed to get more).

    If that’s true, then there’s very little purpose in doing formal performance reviews in organizations where they have no impact on rewards. And it’s hard to see how the average seven to teach lessons that improve performance.

    Bruce/Todd

    In my research into the behavior of great supervisors, we found some interesting things related to the PA process. First we found that the best supervisors did their work “in the cracks in the system” as one put it.

    They did lots of short, informal (not documented) conversations with the people who worked for them. As a rule they also had high performing teams and fewer discipline issues than their peers.

    And when the time came for the annual or semi-annual appraisal, they did things differently from their less effective peers. They spent three to five times as much time in the meeting with a subordinate. And the conversation was focused on the future and what would change. The heavy lifting part of PA had been done throughout the period.

    [Reply]

    Bret L. Simmons Reply:

    Wally, I VERY much appreciate your perspective on this. I share your concerns about the problems being with the system. Not much I can add to the excellent stuff you have written – thanks for sharing! Bret

    [Reply]

  8. Bruce Lynn says:

    Wally – We are almost in agreement on 3 things.

    We both agree that there are ‘bad performance management systems’. My response is to fix the ‘performance management’, your response is to fix the ‘system’. What concerns me about the original post is the implication that a good or even preferred appproach is to throw out the system entirely (without replacing it with a better one).

    We are almost in agreement about ‘high performing teams’. I absolutely concur that the ‘conversations’ and ‘in the cracks’ stuff is great management. However, I think that that stuff is ‘coaching’ (separate from ‘performance management’) and you think that that stuff is ‘perforance management.’

    We are almost in agreement about rewards. You say that if there are no reward decisions at stake, then performance management is moot or meaningless. I agree with that assertion, but I also say that there is always one key ‘reward’ at stake…you get to keep your job for another year.

    Bret – Sports teams are most certainly ‘organisations’ and they most certainly are ‘managed’ (well, the good ones are). Anyway, I’ve decided that the upside to all of this discussion is when I get tired and just want to coast along in life and pull an easy paycheck, I’m going to go work for you. I can’t wait. I’m looking forward to all the conversations. :-)

    [Reply]

    Bret L. Simmons Reply:

    I’m not sure you would want to go to work for me, Bruce. I my system of management we don’t carry anyone. Everyone has to step up and contribute to improving the system. We don’t have a crappy PA system to hide behind and to keep people fearful of and dependent on us as managers. We stop making excuses for the things we know are broken and get to work fixing them. Thanks! Bret

    [Reply]

    Susan Mazza Reply:

    So let me get this straight…someone doesn’t agree with your points so you end your argument by making an ungrounded assessment about the person who disagrees with you.

    Your way of engaging here is actually a great example of one of the reasons why any system that relies on the effectiveness of human interaction will inherently be a challenge.

    People love to be right. This gets in the way of listening, hearing, and ultimately learning. And when someone gets lost in their need to be right, if others don’t agree with them they all too often find a reason to make ungrounded judgments about a person, the system and whatever/whoever else they can think of, instead of engaging in what there is to learn so they can contribute to progress.

    On a personal note I found your insult of Bret to be uncalled for and offensive. I find myself wondering what you were really trying to accomplish here.

    [Reply]

  9. Bruce Lynn says:

    What’s the insult? I have like Bret and respect him. I’ve quoted and cited him numerous times in my own blog. Not liking someone’s idea is not the same as not liking the person. Expressing a point in a colourful way is not an ‘insult’.

    Bret has said that he doesn’t believe in having a PA system and I think that opens the door to abuse (from people like my in jest job proposal). I’ve made the analytical argument, but now I’ve coloured it with a more tangible illustration of the point.

    I’m not sure I understand Bret’s response. I’m not sure how he will know I am slacking off without performance assessment. Even more importantly, I’m not sure how he is going to dismiss me without getting himself liable to court action without such a system.

    You think I am trying to ‘be right’ here? Try talking to someone who’s new house or vacation depends on their performance appraisal. Then you will see wanting to be ‘right’.

    Curiously, my whole response to Wally was highlightinng common ground and then highlighting the differences. That doesn’t sound like someone who wants to ‘be right.’ I’m the first person who is delighted to be wrong (my own personal blog is about ‘Embracing Failure’).

    My understanding is that the great advantage to commenting systems in blogging is the engagement of different opinions. Comments are not just cheerleading sections for those who agree with the post. Finally, I do feel an obligation to speak up when I hear people proposing concepts that I think are wrong. Dangerously wrong, especially. I seriously fear that throwing out PA system opens reward systems to major abuse where rewards are given out according to politics, favouritism and bias. That is a very dangerous and hurtful state.

    [Reply]

    Bret L. Simmons Reply:

    I’m going to let you have the final word on this, Bruce. THANKS for a great and spirited discussion!! Bret

    [Reply]

    Susan Mazza Reply:

    Clearly I misunderstood your intent Bruce. My apologies for reacting. And I appreciate you clarifying so I am left with the appropriate interpretation. A spirited discussion this has been indeed. The post and comments have certainly provoked my thinking, too.

    [Reply]

  10. Bruce Lynn says:

    Okay, I’ll take the final word on this. ;-)

    It has been a great and spirited discussion. Made me really question alot of my thinking. Frankly, I am going to have a whole fresh new look at PA systems now when I go into companies and question ‘what would happen if they went away’ and ‘how well do they really work’. Congrats on spurring and promoting such a dialogue. Nothing worse that a blog post that whistles silently in the wind.

    [Reply]

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