(Image Credit: Doug Buckley of Hyperactive Multimedia at http://www.hyperactive.to)

I call this Part I not because I know what Part II will be… but because I know there will be at least one followup to this post sometime in the future.

Last weekend I finished preparing the report that will be used for my Annual Performance Appraisal (or whatever they’re calling it). To do this, I had to reflect on (and in some cases, remember) all the contributions I made to my job and to society between May 15, 2010 and May 14, 2011. Our department head will use this report, and presumably his interactions with me over the year, to determine whether I’m worthy and where I need to improve. As a result, I’ve been thinking about the nature of performance appraisals over the past few days.

One of Deming’s “Seven Deadly Diseases” is the practice of performance appraisals, which naturally includes merit reviews and annual reviews. Such reviews are ubiquitous in most industries, and often, pay raises are tied to the results. Humorously, at my last job, the HR department routinely ensured the workforce that our performance reviews were NOT in any way related to our pay increases – even though as a manager, I was aware of many cases where the information did indeed influence the numbers (consciously or subconsciously).

I believe, from reading Deming’s books and a whole host of journal articles on Deming-related topics, that he had two reasons for feeling this way: 1) performance appraisals are anathema to “driving out fear,” one of his 14 points, and 2) the practice of performance appraisal assumes the duality of manager vs. employee; (s)he who wields power vs. (s)he who does not; the active evaluator vs. the passive evaluated. By instituting a performance review process, we are establishing a power structure whether we want to or not. Progressive managers might use the performance review as an opportunity for two-way dialogue and a cooperative exploration of strengths and opportunities for improvement. Progressive organizations might use a 360-degree approach, a la Jones & Bearley , but the underlying dynamic is the same: I’m telling you what I think about you and that’s my evaluation. I’m not familiar with any managers or organizations who can pull this off with impartiality and avoid the many sources of bias that can creep into the process.

What if I’m just a really bad observer? What if I’m observing you based on the wrong criteria – or worse, criteria that I just don’t have the experience to honestly evaluate you against? According to quantum physics, there’s no such thing as an observer. The presence of an observer makes him or her a participant in the dynamics – and thus outcomes – of the system. There’s no way to sit outside the system and just watch without affecting what happens.

So what’s the solution? Here’s my idea for today, and I don’t think it’s that revolutionary: 1) Each individual should actively take responsibility for his or her own performance to standards and performance improvement (yet another one of Deming’s 14 points), and 2) Teams should engage in continuous dialogue about individual and collective performance meaning that everyone is responsible for making sure the following questions are asked repeatedly by every member of the team:

What are we trying to accomplish together?

How are we doing? Are we making progress, and if so, what should we keep doing?

If so, what’s working right? If not, what can we do to fix it?

Then commit to doing whatever it is you decided to do.

Like I said, not really revolutionary. The only new idea here is that the individual should aggressively manage his or her own contribution to the objectives of the team or organization, seek out others’ opinions of his or her strengths and weaknesses, seek out quality standards to measure one’s self by, and take responsibility for helping the team ask the important questions above. If the individual is responsibly managing his or her own performance and demonstrating continuous improvement, the system of performance appraisals becomes moot.

It turns into a pull system rather than the push system than it is now.

The obvious problem? Not everyone cares about their own individual continuous performance improvement. As a manager for over a decade, I’ve had employees who were intellectual lazy, physically lazy, intellectually weak and trying hard to cover it up, or just in the job for the paycheck so they would do anything to avoid doing real work. Performance appraisals serve the purpose, in my opinion, of forcing dialogue with these employees who otherwise might not talk about their performance at all. Sometimes it works, sometimes it doesn’t. In many cases managers and employees trudge through the performance review process on autopilot. It becomes a drawn out paper exercise; an infrequent opportunity to shield a company from liability in case a disgruntled employee feels they’ve been wrongly terminated.

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