The End of the Performance Review

FREE SAMPLER!

Introduction And Chapter 1 Enter WSAMPLER13 on www.palgrave.com to get a 30% discount.

Thank you for downloading this free sampler of

THE END OF THE PERFORMANCE REVIEW

A New Approach to Appraising Employee Performance

by Tim Baker | Available now | 9781137347497

Most organizational leaders are locked into conducting annual or bi-annual performance reviews with their staff, even though they know the system is not working.

Performancew reviews are costly, time consuming and often a one-way monologue without followup. Organizations need an entirely new approach to managing performance.

The End of the Performance Review is a thoroughly tested, distinctive alternative that draws on well-established principles of organizational behaviour. Based around Tim Baker’s unique ‘Five Conversations’, each lasting ten minutes, the reader is offered a new model for performance management that better reflects the changing needs of employees and organizations. With a timely focus on fostering innovation, the book is practical and easy to use – featuring case studies, interviews and useful templates.

If you’d like to purchase the full edition, you can take advantage of our

Special 30% discount offer!

£19.99 £13.99 Visit www.palgrave.com and enter the promotional code WSAMPLER13 at the checkout to claim your discount.

You can also call us on +44 (0)1256 302 866 or email us at orders@palgrave.com.

WHAT PEOPLE ARE SAYING ABOUT THIS BOOK ...

Don’t read this book – that is if you are happy with average performance. For HR professionals and managers whose careers depend on creating a culture of high performance and delivering performance outcomes, this book is an absolute must read.

Danny Hovey, National Manager – Organizational Development, Aurizon A very thought-provoking and alternative way to consider the age-old performance management issue. The tools provided to assist in opening and continuing the dialogue between an employee and their supervisor are extremely valuable. The End of the Performance Review has definitely made me reconsider our processes, conversations, and supervisor preparation.

Barbara Miller, Director – People and Culture, CQUniversity Tim’s Five Conversations Framework is a simple, non-threatening structured approach for managers to adopt and adapt! It brings together previous theories, logic, and business approaches to provide guidance on what are often considered by managers as their toughest management responsibilities.

Renae Jones PhD, Change Management Consultant With check-lists, examples, templates and tips, plenty of detail and useful chapter summaries, Tim’s latest work is a great source of practical guidance and support for any contemporary organization. It outlines simple frameworks and provides a structure that makes it easy for managers to address key issues of performance using concepts we know – but often don’t know how to implement. Tim dares to look at performance from a learning perspective, challenging the manager to view their role as coach or productivity facilitator.

Chris Burton, Asia Pacific Training Manager – Team Management Systems

The End of the Performance Review

The End of the Performance Review

Tim Baker A Ap Ne Pe pr w A rfo ais p rm ing pro an Em ach ce p lo to ye e

© Tim Baker 2013 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission.

No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages.

The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

First published 2013 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010.

Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world.

Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries ISBN: 978-1-137-34749-7 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin.

A catalogue record for this book is available from the British Library.

A catalog record for this book is available from the Library of Congress.

Contents

Foreword

xi

Acknowledgments

Introduction

xv 1

1 Abolishing the Standard Performance Review 2 The Five Conversations Framework 3 The Climate Review Conversation

30 49

4 Moving from Job Focus to Performance Focus 5 Bye-bye Job Descriptions

6

69

86

6 The Strengths and Talents Conversation

100

7 The Opportunities for Growth Conversation 8 The Learning and Development Conversation 9 The Innovation and Continuous Improvement Conversation 173 10 Implementing the Five Conversations Framework 194

130 155

11 The Final Conversation

206

APPENDIX – Templates for the Five Conversations 221 Index

235

FIGURES 5.1

A performance management framework

6.1

Margerison-McCann types of work wheel

6.2

Margerison-McCann team management wheel 110

TABLES The Five Conversations Framework The ten most-valued job skills

78

32

95 109

Introduction

The End of the Performance Review is primarily written for HR professionals charged with the responsibility of putting in place a performance management framework across their organization.

I feel passionate about helping HR professionals increase their organizational effectiveness. In particular, I want to help improve performance across the organization by abolishing the standard performance review system and replacing it with a better approach: the Five Conversations Framework.

The traditional performance review system originated from the military and whilst it may have served its purpose, it is now time to throw it out and ďŹ nd a better alternative. The Five Conversations Framework is an entirely new approach; it addresses the myriad of complaints and concerns I hear from managers, employees and HR professionals about the conventional performance review system.

1

Most organizational leaders are locked into the belief that they need to conduct annual or bi-annual performance appraisals of their staff. Yet they acknowledge that the system is not working.

Human resources (HR) managers are caught in the middle of all this. The Five Conversations Framework I share with you in this book promises a way forward for HR, managers, employees, and ultimately the development of the organization.

2 The End of the Performance Review

Performance management is increasingly being spoken of in articles, blogs, and management books and is the topic of conversation at HR and management conferences all over the world. Not all this commentary is positive; many people are seeking answers to the perennial challenges of getting the best from people in their role at work. The Five Conversations Framework answers some of these questions, particularly in relation to offering an original and comprehensible alternative to the old performance appraisal system. As we increasingly recognize the value of human capital in the modern workplace, fresh insights and new approaches to managing people’s performance are undoubtedly needed.

In essence, the purpose of the Five Conversations Framework is to offer HR professionals and organizational leaders a simple and proven replacement for an artefact of the 20th-century workplace: the performance appraisal. Apart from being a more efficient and effective way to manage performance, this new approach is a valuable process for changing the psychological contract between managers and workers to better reflect the changing needs of both entities in the employment relationship.

From my knowledge in the field of performance management over 17 years as an international consultant, this book promises to make a unique contribution to human resource development. The framework I use in the Five Conversations is well thought through anddespite being one of a kindis based on sound and wellestablished principles of organizational behavior.

Being distinctive, the framework underpinning this new method of performance management adds value to the current body of work in the human resource development field by modernizing

3 Introduction

the employment relationship, challenging leaders and managers to adopt a new way of developing human potential at work. I am sure you would agree with me that human resource development as a discipline is badly in need of an injection of new and original thinking.

Apart from providing a different approach, the Five Conversations Framework has three points-of-difference that set it apart from performance review systems. First, while most approaches concentrate on weaknesses or opportunities for growth (and overcoming weaknesses is covered is this book), the Five Conversations Framework focuses on strengths and talents, to which a chapter is devoted. More specifically, this chapter discusses the recognition and ulitization of innate abilities and how they can be used in an employee’s current and future organizational roles.

Second, and the subject of another chapter, the Five Conversations Framework advocates converting job descriptions to role descriptions. Role descriptions cover non-job roles such as being a ‘team player’, skills development, and contributing to innovative and continuous improvement initiatives within the organization.

Third and another chapter topic, the Five Conversations Framework provides ways and means of conceptualizing performance from the perspective of being innovative and continuously improving processes and procedures. This is consistent with the needs of organizations in the 21st century. Each of these three points-ofdifference makes a unique contribution to the literature on the subject of performance management and will hopefully enhances your ability to improve efficiency and effectiveness within your organization.

Besides HR professionals, The End of the Performance Review is relevant to all managers, whether they are executives or frontline

4 The End of the Performance Review

supervisors in small, medium, or large organizations in either the public or private sector, across all industry groups.

Many managers I speak to tell me they are frustrated with the constraints of the standard performance review system that is currently being deployed. From my experience, the vast majority of managers are looking for a better way to develop their staff and a replacement for the current system; hence my inspiration for writing this book. Those on the receiving end of annual and bi-annual appraisals will undoubtedly see the sense in the framework I will outline here. And HR professional will be offered another framework for transforming the performance system within their organization.

Chapter 1 takes a critically reective view of the traditional appraisal system. The Five Conversations Framework is explained comprehensively in Chapter 2. The ďŹ rst of the conversations in the framework is the Climate Review and it is covered in Chapter 3. Chapters 4 and 5 challenge conventional thinking about performance and conceptualize the organizational work people do as a role rather than a job. This change of perspective necessitates moving from job descriptions to role descriptions.

We turn to the second conversation in Chapter 6, the Strengths and Talents conversation. Once we have discussed identifying and utilizing employees’ natural strengths we then consider the third conversation, Opportunities for Growth, in Chapter 7.

Chapter 8 covers the conversation on learning and development needs and Chapter 9 is the last conversation in the framework, on ways and means of improving the efficiency and effectiveness of the organization; it is entitled The Innovation and Continuous Improvement Conversation. In Chapter 10 we consider some strategies for implementing the Five Conversations Framework

5 Introduction

in an organization. I interview an HR professional who has implemented the Five Conversations Framework in several organizations and appropriately entitle Chapter 11: The Final Conversation. I have included some templates in the Appendix that you will find useful for recording these Five Conversations.

Enjoy.

1 ch ap te r

Abolishing the Standard Performance Review

It’s 9 am on Monday and Bob is sitting across the desk from Terry in Terry’s large office; the early morning sun is streaming through the half-closed louvers and casting some shadows across Terry’s big, black shiny desk. It’s annual performance review time and everyone is on their best behavior. There is a degree of tension and apprehension around the office. Sitting in the chair opposite Terry, Bob looks as though he is sitting in an airport lounge, having just been told that his flight has been delayed an hour and it’s already 10.30 at night.

TerryBob’s bossisn‘t feeling his best either. He is a little apprehensive about appraising Bob’s performance. As Terry is reading through Bob’s self-appraisal behind his large, imposing desk, Bob sits with a look of disinterest on his face, chewing a piece of gum, arms folded and staring straight ahead into the distance.

6

With some variation this familiar scene is being played out in almost every office, production area, and worksite all over the world.

7 Abolishing the Standard Performance Review

So familiar are we with this scene, the UK BBC sitcom The Office has a hilarious parody on the annual appraisal. The skit shows ‘David’ conducting the annual performance appraisal on ‘Keith’ in David’s office. This particular scene is readily available through YouTube; check it out if you have not already seen it, it is very funny. Like most good comedy, it has more than a glimmer of truth to it.

In that skit, David struggles his way through myriad paperwork.

Keith is completely detached, arms folded, deadpan expression, and less than helpful on the other side of the desk. David asks Keith why he has not filled in his self-appraisal form, and Keith responds by saying he thought David was suppose to fill this in as his boss. It goes downhill from there.

In obvious frustration David moves on to the ‘Q and A’ section of the appraisal paperwork. Again this is not filled out. David uses this as an opportunity to ‘engage’ with Keith. ‘To what extent have you been trained to use the computer effectively?’

David reads from the forms, without making eye contact. With no reply from Keith, David reads out the suite of options: ‘One, not at all; two, to some extent; three, reasonably competent; four, competent; five, very competent; or don’t know.’ ‘Don’t know,’ comes the unconsidered reply from Keith, still staring into space.

Plowing on, ‘To what extent do you feel you are given the freedom and support to accomplish your goals?’ ‘What are the options again?’ asks Keith. ‘Always the same. One, not at all; two, to some extent; three, reasonably competent; four, competent; five, very competent; or don’t know.’ ‘Don’t know’ comes the humdrum reply from Keith again. And on it goes in the same non-communicative pattern.

8 The End of the Performance Review

In the end David challenges Keith by asking, ‘If “don’t know” wasn’t an option, what would you put?’ To which Keith replies, ‘What was the question again?’

Somewhat exaggerated perhaps, but nevertheless this is the kind of disengagement that happens in all types of industries for a high percentage of employees and managers once or twice a year.

I am sure you have your own war stories, either as someone like David conducting the appraisal or like Keith, the person on the receiving end of the appraisal, or both.

When something as serious as a performance review becomes satire, then perhaps it is time for a re-think about this long-standing organizational ritual. And when that sitcom scene becomes one of the most popular downloads on YouTube, you know that it is definitely time to take stock and re-evaluate the appraisal.

When I mention the term performance appraisal or performance review, what comes immediately to your mind? Of course, I don’t know what you thought, but I am pretty confident that the thoughts you had were not favorable.

By the way, I will use the terms appraisal and review interchangeably throughout the book.

As you are probably painfully aware, performance appraisals typically come around once or twice a year and they are usually not something that everyone looks forward to. I have spoken to lots of people in organizations over the past decade, and the vast majority of people are not really excited about the traditional appraisal interview. In fact many people actually dread them. Yet, psychologists tell us feedback is important. We all need feedback, they say; we need to know where we stand.

9 Abolishing the Standard Performance Review

Whether you coordinate the appraisal system, are a manager who conducts the appraisals, or are an employee on the receiving end of an appraisal, you probably have some reservations about the standardized process. Why? Is it the formality associated with the appraisal? Is it the paperwork? Is it the unexpected or unknown? Is it the apprehension of not getting or giving a pay rise? Is it giving or receiving criticism? It could be all these things and more.

Of course, not everyone faces the performance appraisal interview with trepidation. Some enjoy it and even look forward to it. But they are likely to be in the minority. The majority of people find the whole experience unproductive and stressful. Specifically, the idea of preparing to appraise someone’s work performance or being on the receiving end of an appraisal is not everyone’s idea of fun.

If that’s the experience of most people, we have to ask the question: Is it worth it?

Performance appraisals originated from the military The traditional performance appraisal system is based on the military model. Like many things in the military, the performance appraisal has been adopted in modern organizations. In the old military environment, the superior gives the subordinate a one-way monologue on what they are doing wrong and occasionally what the subordinate is doing right. The recipient is usually a passive and unenthusiastic receiver. This traditional model is based on a power relationship.

10 The End of the Performance Review

What the boss thinks, irrespective of whether he or she is right or wrong, carries greater weight than the recipient’s opinion.

The appraiser has power over the person being appraised.

What the boss thinks is more important than what the subordinate thinks. They are in control and the subordinate is dancing to the tune of the appraiser. It is not a constructive dynamic to discuss developmental and performance issues. Like most things military, the performance appraisal system has been modified for industry to some extent, but the modification does not go far enough.

th an ere of im is s po ba till w lan er ce

For instance, the power imbalance has been somewhat equalized in the civilian (and military) workplace. Employees are now asked to rate themselves and discuss their own perspectives about their performance across several criteria. Good managers try not to do too much talking and attempt to adhere to the rule of doing no more than 50 per cent of the talking, encouraging the employee to talk by asking open-ended questions. A skilled manager, though, uses questions in an attempt to draw out the quiet employee. With verbose employees, these skilled managers attempt to summarize the key points made and move the conversation on.

Irrespective of the skill of the manager, these meetings are still controlled by the manager. His or her opinion generally carries more weight and the conversation is based on discussing the observations the manager has made of the employee. So, in reality, there is still an imbalance in power. This power dynamic is based on the potentially flawed assumption that managers know best: sometimes they do and sometimes they don’t.

11 Abolishing the Standard Performance Review

The problem with the traditional approach There are several inherent problems with this conventional appraisal system. I know this after interviewing 1200 managers and HR professionals over the past few years across all industries.

I simply asked them to identify any shortcomings the standard performance appraisal system has. Responses varied, but essentially I identified eight themes from my research. The eight shortcomings are: Appraisals are a costly exercise.

Appraisals can be destructive.

Appraisals are often a monologue rather than a dialogue.

The formality of the appraisal stifles discussion.

Appraisals are too infrequent.

Appraisals are an exercise in form-filling.

Appraisals are rarely followed up.

Most people find appraisals stressful.

We shall look at these deficiencies of the standard performance appraisal system in more detail in this chapter before looking at the alternative approach I am proposing in the next chapter.

Appraisals are a costly exercise I think in many cases, the traditional approach of appraising performance is a waste of time and can even cause more harm than good. It consumes enormous amounts of time with arguably little return.

12 The End of the Performance Review

Consider this: An SME of 100 employees would devote approximately 200 hoursif done twice a yearto the interviews alone (assuming the meetings each last one hour). If you consider that two people are in these interviews, that is 400 hours of time taken up in face-to-face meetings that could be spent on other workrelated activities. This does not take into account the time the manager and employee take to prepare for these interviews. Let us assume that the managers and the employees take 30 minutes each to prepare for the interviews on average. That amounts to another hour per appraisal. With 200 appraisals that is another 200 hours. We are now up to 600 hours a year. While the manager and employee are spending time preparing for and conducting their interviews they are neglecting their core duties. Accountants refer to this as an ‘opportunity cost.’ In this example, that amounts to another 600 hours of time. So we are now consuming 1200 hours of time on this appraisal exercise. Working on a standard eight-hour working day, this means that approximately 150 person days are devoted to the exercise of appraising performance in an organization of 100 people. In dollar terms, and based upon an aggregate $65,000 wage, the average employee receives approximately $178 a day. $178 by 150 days equals $26,700.

This figure, of course, is not listed in the profit and loss statement.

But imagine if you were a manager and noted a line item in the expenses column of $26,700 with no explanation next to it. This is a fairly conservative figure and it is more likely to be higher than this, particularly for a larger business. At any rate, would you not query this and ask: What was this expense item? And what return did the organization get for $26,700?

Other questions you may rightly ask are: Are we getting value for money from this exercise? Or could we spend this time and

13 Abolishing the Standard Performance Review

money doing something else? I think it is time we questioned this ‘investment’ in time. Is there a better way? For instance, if this SME devoted 150 days to directly improving its business processes and systems, would that make more of a difference? Or, what about devoting 150 days to improving the quality of service to customers? Would 150 days ‘working on the business’ instead of ‘in the business’ make a discernible difference in performance? You may argue that appraising people’s performance is in fact working on the business. But does it generate significant value?

The formal appraisal system is time-consuming and therefore costly.

It is questionable whether it is worth the time, effort, and cost. Could that time be better spent elsewhere in the business? According to many managers I speak to, the answer is yes. So why do we do it?

I think the main reason we go through this performance appraisal ritual once or twice a year is that it provides the organization with a legally defensible position. In other words, if and when an employee is not performing on the job, the organization has documentary ‘evidence.’ The written records provide substantiation that the poor-performing employee is not meeting standards expected of them. Courts of law and lawyers love written documents and what better way of providing that evidence than through a written appraisal signed by both the manager and the employee?

But the reality is that it is not totally legally defensible since underperforming employees are expected to be given an opportunity to ‘lift their game.’ Consequently the appraisal needs to be followed up with a performance plan. In other words, there ought to be tangible evidence that the employee was given a fair and reasonable opportunity to enhance his or her performance

14 The End of the Performance Review

before they are dismissed. That necessitates a process of consistent and persistent feedback.

Appraisals can be destructive Aside from the issue of cost, many managers I speak to tell me that performance appraisals can cause more harm than good.

Consider a typical example: A manager neglects to give any feedback to a staff member throughout the year. Come appraisal time, the managerthrough necessitylets his or her staff member know that they are not happy with a particular aspect of their performance. Perhaps they do this in a tactless, destructive way rather than in a tactful, constructive way. The employee is naturally blind-sided and offended by what they perceive to be unwarranted criticism and a personal attack. They were not expecting this criticism and did not appreciate the way it was delivered. The recipient is unpleasantly surprised, is intimidated, or reacts negatively to what they think is unfair criticism of their work. This scenario is not uncommon.

At the same time, the manager giving this unwelcome appraisal gets frustrated and annoyed with the employee because they will not contribute to the ‘discussion.’ The offended employee clams up. Or perhaps they lash out at the manager. Either way, this exchange in these circumstances is likely to be unhelpful and potentially detrimental. The manager cannot understand why the employee ‘doesn’t get it’ and is seemingly unaware of his or her shortcomings. On the other hand, the employee is angry that they have never heard this criticism before. Distrust sets in and their working relationship is temporarily or even permanently damaged.

15 Abolishing the Standard Performance Review

I observed such a situation recently. A manager was concerned about one of his colleagues and his capacity to write clear, concise, and mistake-free reports. This manager had never given this feedback directly to his staff member. But during their appraisal interview, the manager did mention it and his concerns about the team member’s report-writing abilities. Apart from not giving this negative feedback before the interview, the manager did this in a tactless way. He started the feedback with the words: ‘All your reports are poor and below standard ... .’

Predictably the employee reacted defensively and negatively.

He criticized his manager for never pointing this out before and complained: ‘If it was such a big issue, why didn’t you speak to me earlier about this?’ In turn, the manager reacted aggressively and said that the employee should have been aware of the issue and that it was not his responsibility to point this out. ‘You should have known; it’s obvious,’ the manager retorted. Under these circumstances, performance did not improve; it actually got worse. And the professional working relationship was damaged to the point where the two were barely on speaking terms. At its most destructive, the performance review could permanently destroy the fabric of the working relationship.

Appraisals are often a monologue rather than a dialogue As I mentioned earlier, the concept of the formal appraisal is based on a power relationship; that is, the manager has the upper hand.

He or she has a greater say in the appraisal of the staff member.

The employee usually has a say, but it is often in response to the

16 The End of the Performance Review

manager’s observations. It is an appraisal, not a conversation on performance. Managers are encouraged by HR to have a conversation with each of their staff members, but in reality it is an assessment of performance.

Although the power imbalance has been addressed, it is stillin most casesa lopsided arrangement. People on the receiving end of the appraisal are now typically requested to come prepared to the meeting. They are often asked to rate themselves against set criteria and their ratings are taken into account. Nevertheless, it is the appraiser who has the upper hand and his or her evaluation is assumed to be more important. The person being appraised is naturally aware of this and the general tenor of the review is usually guided by the appraiser’s judgment.

The one-way nature of these appraisal meetings can be problematic for several reasons. If the manager is unfamiliar with the work of the employee, it generally means that the manager’s view is not challenged to the extent that it might be. The employee may feel the need to be more assertive than would normally be the case to equalize the imbalance in the relationship dynamic.

On the other hand, some people being appraised may feel less assertive due to the power relationship and come away with the feeling that they have not been listened to, or that they did not challenge the appraiser’s viewpoint enough. Some managers complain that they cannot get the staff member to contribute enough to the conversation; that they feel they end up doing too much talking. Then again, some managers will protest that they couldn’t get a word in. A dominant staff member, who may feel threatened by this power relationship, can become verbose. Either way, it is less than an ideal situation.

17 Abolishing the Standard Performance Review

Closely aligned with the one-way nature of the traditional performance discussion is the issue of power; the boss holds the upper hand in these meetings. The discussions are often held in the boss’s office at a time suitable for the boss with an agenda designed by the boss. Employees canand often dofeel powerless and uncomfortable in this situation. In short, the appraisal is done on the boss’s turf and on his or her own terms.

The result of this power relationship means that the discussion is often not as productive as it should be. For example, people on the receiving end of the appraisal may not prepare too thoroughly on the assumption that their boss’s judgment carries more weight.

Also, the manager may not engage the employee in dialogue as much as they could. They may see their role as an assessor rather than a facilitator.

The formality of the appraisal stifles discussion These formal performance appraisals are not really conversations; rather they are official meetings between powerful and less powerful persons reliant on hierarchical position. Under these circumstances, the potential for a productive two-way conversation is limited.

The formality of the formal appraisal system adds to the difficulty of stimulating discussion. Discussion is stifled in order to get through the process. Employees may not always have the opportunity to fully express their point of view. Issues are therefore often dealt with superficially. The exercise more often

18 The End of the Performance Review

than not becomes a ‘box-ticking exercise’ rather than a meaningful dialogue.

A

T

T

H

E

C

O

A

L

F

A

C

E

I recall speaking to an 18-year-old woman fresh out of school and nine months into her first job in an SME. She was quite distressed. Melinda had not received any feedback from her boss in nine months on the job. I asked Melinda whether she would like me to approach her manager on her behalf and ask him if he could let her know how she was settling into her first job. Melinda was quite enthusiastic about this prospect and I subsequently approached her boss, Ted. I proceeded to explain to Ted that Melinda was concerned that she had not received any feedback from him since she had started and suggested that he sit her down and explain how she was doing in her work. Before I could finish my sentence, Ted interrupted me and said, ‘No, I can’t do that.’ There was an uncomfortable pause in our conversation. I said, ‘May I ask why you can’t do this?’ I was thinking there must be some rational explanation. Ted retorted, ‘If I do that for Melinda, I will have to do that for all my staff.’ I was rendered speechless.

Appraisals are too infrequent Feedback in the formal appraisal system is certainly not immediate. And why is this a problem? Well, the more immediate the feedback the more likely it is to be perceived by the employee as important in the eyes of the boss. If feedback on a report is left until appraisal timepossibly several months laterthe employee is probably thinking to themselves, or may even say: ‘If this is such a big issue, why didn’t you raise it with me at the time I wrote

19 Abolishing the Standard Performance Review

the report?’ The result of this is that the delayed feedback is not always taken seriously by the employee. If the matter of a poorly written report is raised by the manager immediately after the report has been produced, the employee gets the idea that their boss sees good report-writing as a priority.

Objective feedback means that the receiver understands that the feedback is not a personal attack on them. Raising the person’s report-writing weakness several months later can be interpreted by the employee as a personal attack. They may think: ‘My boss is attacking me because he doesn’t like my report-writing.’ On the other hand, if the feedback was immediate and specifically about a particular report, the employee may think: ‘He doesn’t like this report that I have written.’ The focus is on the specific report; it is not a generalization about the person’s ability to write reports.

Perceived generalizations are not always well received by people. ‘You are not very good at report-writing’ or ‘You seem to be critical of everything that is brought up in our meetings.’

A scheduled performance appraisal is not the place to raise these matters. They can be taken by the recipient as generalizations, with no context, and therefore seem to be a personal attack on them as a person.

What about the manager who does give specific, immediate, and objective feedback?

This is great. But under these circumstances why do they need to repeat themselves at appraisal time? What benefit does this serve? I would say: Very little or none. And it is costly apart from unnecessary. For the manager who does not give regular feedback, the appraisal is the time to cut loose and let the employee know

20 The End of the Performance Review

what he or she thinks of them. This is a forum to raise all his or her gripes. And if it is positive feedback, as I have said, it falls on deaf ears, so to speak. That is also unlikely to be effective.

As we know, traditional appraisals are typically done once or twice a year. As such, they become an event. This is one of the biggest shortcomings of the system. When managers are preparing for their appraisals they often mistakenly consider the employee from recent observations. These observations whether positive or negativeare made from circumstances fresh in the mind of the appraiser. What happened three to four months ago is often not discussed or simply forgotten. So the discussions are often based on critical incidents that have occurred of late.

So, what dominates these reviews are usually recent situations. The manager may therefore have a distorted view of the employee’s overall performance. For instance, an employee’s performance over the past two months may have been exceptional and in the previous six months may have been mediocre. And as a consequence, the appraisal is based upon the immediate past, which is not the total picture.

Another problem with the once- or twice-a-year appraisal I have already mentioned is that managers may put off discussing important performance issues until the formal review. They rationalize that they will save this up until then and fail to discuss performance issues when they are current. By doing this, managers conceptualize performance management as an annual or bi-annual event rather than an ongoing process. Employees, on the other hand, do not receive important feedback until well after critical performance issues have arisen.

21 Abolishing the Standard Performance Review

The formal, once- or twice-yearly approach is also open to manipulation. Employees knowing that they are about to be appraised lift their game to ensure a positive appraisal. This situation creates a distorted view of their overall performance.

Once the appraisal is out of the way, the employee reverts back to sub-standard performance until the month before the next appraisal.

Appraisals carried out once or twice a year are more likely to be a snapshot assessment of performance than a continuous performance discussion. Usually the appraiser invites the participant to rate various categories of performance on a scale from exceptional to very poor. The discussion inevitably becomes one centered round the score or rating rather than ways and means of improving performance, particularly if a pay rise is contingent on it.

In preparation for the formal appraisal, managers will typically review the previous paperwork and use this as the basis for the appraisal. This evaluative process generally fails to take into account consideration of the employee’s performance over the past six months. Important learning opportunities are therefore lost in the assessment exercise.

Appraisals are an exercise in form-filling The emphasis on the conventional appraisal becomes an exercise in administration or form-filling. With pressure from the HR department, the manager becomes fixated on filling in the relevant paperwork; dialogue is devalued as a result of the administrative

22 The End of the Performance Review

function of the appraisal. In other words, completing the appropriate forms becomes the central focus and therefore stifles meaningful conversation.

HR professionals are keen that the review process is a vehicle for successfully changing behavior. Understandably, they often ask the question of managers: ‘Have you completed your appraisal?’ This sends the message that the administration of the review is the critical factor, rather than sustainable changes in performance. Because of the reluctance to have the reviews carried out by many managers, the HR department often does not get around to asking the question: ‘How effective was your appraisal in terms of behavior modification?’ In these circumstances, the documentation of the appraisal often takes priority.

Appraisals are rarely followed up Once the documentation and paperwork are submitted to HR, it is, more often than not, business as usual. Both the appraiser and employee do not have to worry about the exercise again for 6 to 12 months. The consequence of this attitude is that very rarely is anything followed up between appraisals. People move on and the key points are soon forgotten. As a result, nothing really changes.

The fact that nothing really changes means that the formal appraisal itself is looked upon as a cynical exercise by everyone.

People see it more as an administrative process than as a modifier of behavior.

23 Abolishing the Standard Performance Review

Most people find appraisals stressful The focus of the ‘discussion’ is rarely about the constructive ways in which an employee’s strengths can be utilized and weaknesses overcome. As I mentioned, it is usually viewed as a ‘box-ticking’ exercise that bypasses what should be the essence of the conversation, which is behavior change. Questions such as ‘What are your strengths and how can we use them to best advantage in this organization?’, ‘What can I do as your manager to help you further develop those strengths?’, ‘What areas do you need to work on?’, and ‘What can I do as your manager to support you in these areas we have identified as areas for improvement?’, which go to the heart of an effective discussion on performance, are overlooked. There is too much emphasis on the appraisal and this detracts from the potential to have a meaningful conversation about an employee’s performance.

Furthermore, instead of overcoming weaknesses, it is often more productive to capitalize on the strengths of the person being appraised. Our society teaches us from the beginning of schooling to work on our weaknesses and take for granted our strengths. Yet it is a far better investment to focus on taking advantage of our innate talents. If we devote as much time and energy to building our capabilities as we put into addressing our shortcomings, we would all be better off. This is what highly successful people do in all walks of life: concentrate on maximizing their strengths. They turn their talents into great assets by working hard on developing innate aptitudes. We all have a limited amount of time at our disposal. You and I will get a better return on developing our talents. I will have

24 The End of the Performance Review

more to say about this in Chapter 5ďšźThe Strengths and Talents Conversation.

At any rate, employees’ work performance ought to be appraised on the job on a regular basis, not once or twice a year.

Employees need not be summonsed to a formal performance appraisal to hear what their manager thinks of their performance.

It should already have been discussed day by day, task by task, moment by moment. If anything, this formal discussion should be about properly documenting that information, discussing how to build upon the strengths of the particular employee, and considering their opportunities for growth.

This ought to be done collaboratively, consistently, and constructively.

Not everything we do at work is enjoyable. A lot of the work we do is drudgery. But unnecessary drudgery is pointless. People rarely get energized around performance appraisal time. Imagine people jumping up and down in excitement about giving or receiving an appraisal! I think the opposite is true: Most people dread it and often delay it until the very last minute. That is not to suggest that some employees really look forward to feedback from their manager. In fact, one of the reasons a person may look forward to their appraisal is that they may have never received any feedback previously and they are curious to know how they are faring. In any event, the experience is usually not the highlight of the year.

So these are the eight issues that my research indicates are the potential shortcomings of the standard performance review system.

25 Abolishing the Standard Performance Review

The value of feedback I know I am painting a bleak picture. And I understand that not all appraisals are negative; that is, that they are poorly run or poorly received. But many are and hopefully you agree with me that it is time we took a new approach to appraising performance.

Please don’t get me wrong; I am not against performance feedback.

In fact I believe it is one of the most important things a manager can do in his or her leadership role. Organizational psychologists tell us time and time again about the importance of feedback and its link to performance improvement and motivation. You would be hard-pressed to find a book on management and leadership that does not extol the virtues of timely, tactful, and specific feedback on performance. Performance management is central to the role of the manager.

What I am critical of is the value of the conventional appraisal system and the faulty assumptions underpinning it. I am all for constructive feedback, but I just do not think this annual or bi-annual event is the way to do it efficiently and effectively.

In my view, feedback should be ongoing, two-way, and developmental. The traditional performance appraisal system runs counter to these feedback fundamentals. With a formal performance appraisal system, managers are tempted to think: ‘I will “discuss” the staff member’s shortcomings in the annual performance appraisal interview. It will have more impact then. I will save it up until then.’ So under these circumstances, the feedback is not immediate and ongoing. And because the ‘feedback’ delivered during the appraisal interview is such a shock, the employee either clams up and does not enter into a

26 The End of the Performance Review

constructive, two-way dialogue or gets upset and becomes irrational.

Under these circumstances, the appraisal becomes a one-way street, often delivered as an unpleasant surprise to the recipient.

It is therefore often perceived as criticism rather than constructive feedback. In the context of the annual performance appraisal it is received by the employee as an unfair evaluation. In this kind of situation, the opportunity to develop that employee is lost. This is not the way feedback should be delivered or received.

What about positive feedback?

Here again, the manager may think that the appraisal is the most appropriate forum to deliver positive reinforcement. But once again, it is likely to be ineffective. The recipient of the positive feedback will undoubtedly be surprised, though at least pleasantly surprised. Nevertheless, the recipient maybe thinking to themselves: ‘If it was that good, why did my manager leave it until the appraisal to tell me? He or she could have told me at the time.’ The interpretation that the employee may have is that the feedback is not really genuine and, if so, not really all that important. So it is less likely that the positive behavior is reinforced and repeated.

What if, on the other hand, a manager gives timely and relevant feedback? If feedback is immediate, continuous, cooperative, and constructive, why do we need to down tools twice a year and formally appraise performance? If managers are doing their jobs properly and discussing performance regularly and routinely, the

27 Abolishing the Standard Performance Review

formal performance review becomes redundant. In other words, it has all been said and done.

You may be thinking: ‘Yes, but we have to rate and scale our employees.’ Once again, if we need to rate people, why can we not do it in the workplace, on the job, in the appropriate time and place? Besides, the ratings are not really the most important thing in terms of changing someone’s level of performance. It is what we do about the ratings that counts. In other words, how do we improve these ratings, if they need improving? Or, how do we build on these ratings in a sustainable way, if they are good?

These are the key questions behind a productive performance management system.

What can the employee do to improve his or her performance?

What can the manager do to assist and support the employee in this regard? This is the essence of constructively managing performance. The annual performance appraisal is not the best place to raise these questions. Why? Because often the opportunity to discuss these issues is long gone. It may have happened several months ago. The critical incidents that can be used as examples to reinforce the feedback are often vague memories.

Without doubt, the best way to give feedback on performance whether it is positive or negativeis to give an example or use a critical incident. This then becomes objective. The discussion centers round an incident rather than becoming a generalization about the person.

This chapter has highlighted some of the pitfalls of the traditional performance appraisal system. In short, it is often costly and ineffective. There has to be a better way. There is. And I will outline a better way in the next chapter. I would encourage you to reflect

28 The End of the Performance Review

on your own organization’s performance appraisal system and ask yourself these important questions: Is our system working? Could it be better? What are the attitudes around the office before, during, and after performance appraisal time? What are our good managers doing in terms of feedback and how is it delivered?

Of course, there are many types of appraisal systems being used today that attempt to overcome the eight deďŹ ciencies I have found from my own research. Some of these include 360-degree feedback, management by objectives, evidence-based feedback, and a variety of rating scales. All organizations tailor their performance review system to suit their particular needs. However, the key point here is that they are all pretty much based on the assumptions of the original military model of the performance review. They are still essentially done with a degree of formality, often infrequently, with a lack of emphasis on dialogue and follow-up. The Five Conversations Framework provides a useful substitute for this outdated performance review process.

5

4

3

2

1

The Top 10 Key Points The traditional performance appraisal system is based on the military model.

The standard performance review system consumes enormous amounts of time with questionable returns.

Performance reviews can be destructive rather than constructive.

The concept of the formal appraisal is based on a power relationship and is often a monologue rather than a dialogue.

The formality of the appraisal sties discussion.

29

10

9

8

7

6

Abolishing the Standard Performance Review

Formal performance appraisals being held once or twice a year are events rather than an ongoing feedback process.

The emphasis on the conventional appraisal more often than not becomes an exercise in administration or form-filling.

Performance appraisals are rarelyif everfollowed up immediately.

Most people find appraisals stressful.

Feedback needs to be specific, immediate, continuous, cooperative, and constructive.

Order your discounted copy of The End of the Performance Review today!

You can order online at www.palgrave.com. Just enter the promotional code WSAMPLER13 at the checkout to claim your discount.

You can also order by phone: +44 (0)1256 302866 Or by email: orders@palgrave.com

‘Tim Baker’s new book revolutionizes the way to view and conduct employee appraisals. His method is brilliant in its simplicity and highly effective in its approach. ‘The End’ for the traditional performance review but just the beginning for a groundbreaking new model.’

- Marshall Goldsmith, global leadership thinker and million-selling author or editor of 32 books, including the New York Times bestsellers, MOJO and What Got You Here Won’t get You There

‘I believe this book will revolutionize the way we appraise performance in the modern workplace.’

- Brent D. Peterson, Ph.D., co-author of Fake Work: Why People are Working Harder Than Ever but Accomplishing Less, and How to Fix the Problem

‘My clients love using the 5 Conversations! I think it is a very good process and it has a huge amount of value for organisations who commit to taking it on.’

- Anne Tocker, HR Manager, Watts Next