"Great
coaches consistently get the most out of the their people, because they
consistently put the most in to their people."
- Brian
Souza
From Patrick Thean:
Aubrey Daniels is a clinical psychologist who has spent more than
thirty years dedicated to helping people and organizations apply the
scientifically proven laws of human behavior to improving workplace
performance. I first heard him speak at a conference several years ago and
remember his ideas as being the most insightful and practical of all the
speakers.
There were several key takeaways for me that day, but the one that
had the biggest impact on me was his idea that annual performance appraisals
are not only a big waste of time, but actually damaging to performance. This
statement was both shocking and liberating to me. My background and experience
up until then had been with very traditional, medium to large size companies,
where I had been tasked with both giving and receiving many, many performance reviews
over the years. We were always trying to improve the process, use a new form,
make it easier and find a way to get them all done by a certain time. No matter
what new flavor of performance review we tried, we still always dreaded them.
We dreaded giving them and receiving them.
I think the one statement Daniels made that I remember most was
that "the most recent trend is to take this universally despised,
ineffective, time-wasting practice we dread doing once a year, and force
everyone to do it quarterly." OMG, that was exactly what we were talking
about doing! We were stuck in the old paradigm of trying to fix a system that
wasn't just broken, but was fundamentally contrary to what we wanted to
accomplish.
In addition to Performance Appraisals, which is #3 out of the 13,
he also points out the flaws of other popular ideas like Employee of the Month
programs, Employee Rankings, Rewarding Things a Dead Man Can Do, and
Overvaluing Smart Talented People. Fascinating stuff.
Here's an outline of what he teaches us about Performance
Appraisals.
How the concept is flawed to begin with:
- It's a punishing
process (and negative experience) for the rater and the ratee. Not only does
no one enjoy this process, Daniel's research shows that 80% of employees
think they perform in the top 20% of the employee population. Not
possible, right? So that means at least 60% of employees will be
disappointed with their score. (Note: a key finding in Daniel's research
on human behavior is that positive reinforcement produces higher rates of
desired behavior than negative reinforcement.)
- Its purpose is
to separate top performers from underperformers. The basic
assumption is that a certain percentage of your employees are not
performing at acceptable levels. In other words, you have not hired well,
some percentage of your people need improvement and you need this process
to help you identify them. That may have been true at the beginning of
industrial management studies, when hiring practices were much less
sophisticated and an employee population could be plotted along a
traditional bell curve. But with all the selection and hiring tools
available today (our favorite is Topgrading) we should have every
expectation that we've hired all A Players, and if we haven't, we
certainly don't need an annual process to point that out to us.
- People cannot
separate a performance appraisal from pay. No matter how
hard you try to separate the two, no employee will enter into a structured
performance appraisal, review, process or even conversation, without
considering the impact it will have on their paycheck. People can be very
emotional when it comes to pay, so by nature, the performance appraisal
conversation will also be emotional. And of course, performance and pay
should be related, but you'll need to read chapter/mistake #6 in Oops! for
more on that.
- Performance
rating categories are poorly defined. Whether you're
using a scale of 1-10, 1-5, 1-3, strongly agree, strongly disagree,
sometimes, always, or any other creative rating structure, these ratings
are going to be somewhat arbitrary unless they are connected to observable
behavior and measurable facts. Most are not.
- It has a lot
more to do with the rater than the ratee. Since most
performance reviews require the rater to share their opinion or make an
assessment of the individual, the results are almost never 100% objective.
Why we continue to do it:
Daniels points out five reasons why companies say they continue
with their traditional performance appraisal process: Employee Development,
Motivation, Promotion, Pay, and Legal Termination. Legal termination is my
favorite - we're so sure we've hired poorly that we want to build a case that
will hold up in court when we fire them and they sue us (see point 2 above -
and spend your energy hiring A Players and taking good care of them rather than
building systems to support your sloppy hiring and poor management.) Daniels
does a good job pointing out how performance appraisals fail to accomplish any
of these five.
But honestly, I think the biggest reason companies continue with
this old-school way of thinking is simply because it's just what has always
been done and they don't know what the alternative is. In fact, I've seen very
successful, growing, companies talk about this as a benchmark for proving they
are becoming a mature, professionally run company. What a shame... they're
going to throw away the naturally developed, positive, culture-building ways
that probably already exist to adopt this negative legacy process, just because
it's what they think successful companies should do.
What to do instead:
If what you are trying to accomplish is an environment where every
employee does their best work every day, then you need a method for letting
people know how they're doing.... every day. Daniels surmises that "if all
employees did outstanding work every day there would be no need for an
appraisal system. Therefore, organizations need the knowledge, systems, and
management practices to create such an organization, because it is
possible."
I believe there are three key components needed to make this work:
- Robust Hiring
Practices:
You need to have confidence that the people you work with are both
committed and capable. Click
here for information on how we think Topgrading can help you with
this.
- Clear Goals and
Expectations: Everyone in the company needs to know exactly what
their role is and what success looks like.
- Constant and
Visible Performance Feedback: The status of individual priorities and
metrics that each individual is accountable for should be displayed
publicly.
- Weekly Coaching
Conversations: 10-15 coaching conversations every week
- coach in practice not in the game and talk about and focus on making
them better and helping them reach their career goals.
It really is okay to walk away from this outdated management
practice if you understand what you need to accomplish and create an
environment where people can be accountable and successful. It still requires a
lot of work, but you'll be spending your time, energy and resources on very
productive and positive forms of reinforcement instead of wasting them on this
negative and unproductive legacy.
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