I like to continue to push for some things that might not seem achievable to many. It is too easy to accept that things have to stay the way they are. Several of Dr. Deming’s list of Seven Deadly Management Diseases are now accepted as serious problems by most. Performance appraisal is a strange disease: most people agree performance appraisals are not effective and indeed are harmful. Yet, most still don’t think anything can be done about it. But we can, and should, take steps to improve. Just don’t do it.

Managers are from Mars, Performance Appraisals from Venus discusses Mary Poppendieck‘s recent presentation – Appraisals and Compensation: The Elephant in the Room

Mary says that there is no valid research showing benefits of performance appraisals. Simply said, “it doesn’t work”. Her biggest complain is that appraisals target individuals (sometimes teams) rather the system itself. She also condemns judgment rather than feedback (system dynamic). Mary went over the false assumptions behind individual pay-for-performance (money, motivation, individual assessment), and the negative effects they have on the system. She finished by a case study done by HP across 13 organizations over a year 4 year period where each division implemented a different type of incentive plan. The results are just mind boggling. They all failed and got canceled.

I strongly suggest chapter 9 (Performance Without Appraisal) of The Leader’s Handbook, by Peter Scholtes, for those thinking about this topic.

Related: Righter Performance Appraisal – Problems Caused by Performance Appraisal – Performance Without Appraisal – Find the Root Cause Instead of the Person to Blame