I was searching for an inspiration, on what to post about this week, and I was inspired by two posts that I saw. One, was a post by Dan, on his WordPress site, called “The Leadership Freak”, and the other was a post on LinkedIn. I forget who wrote the post on LinkedIn. Both, as it so happens, were based on that annual exercise we call The Performance Appraisal.
There are a few aspects that need to be considered here.
1. The Famous Bell Curve
A lot has been written on this subject, and despite the fact that people cannot be fit into a bell curve, organizations will try their best to squeeze people into this curve. Those of you who are scientifically inclined will remember that story of Einstein adding a constant to one of his equations, because the observations did not fit his beliefs and postulates. Later he called it one of the biggest mistakes of his life.
In my last organization, you are first rated on the your performance against your objectives, and company behavior norms. Then, you are “calibrated” against your colleagues in the Region, and this happens in a big meeting, where 90% of the people performing the calibration do not know the people being calibrated. This also does not take into account the peculiar market situation, or constraints, in which you operate. Also, if you take on a challenging target at the start of the year, you put yourself in a situation where you will, in all likelihood, be calibrated against people who took easier targets. Who assesses these targets? So, a smart – politically smart – person will not be motivated to take on a challenging target. This is influenced by, of course, the performance bonus practice.
I met a girl from my last organization who was upset that she could never get a ‘5’ because of the Bell Curve.
Do people fit a Bell curve, or a Pareto frequency, or some other graph? The fact is, that you will have over-achievers, and to bring them down because of a Bell is not so great! Similarly, those who are not such great performers can get pushed up!
While there is no easy answer to this, I would think that organizations should abolish the Bell Curve
2. The KPI
I once knew a chap who had achieved every target against his KPI, bar one. This was bringing down his appraisal. His organization had also completed an acquisition, and he closed the sales of the business (locally), well within the time frame, and within budget. This, despite the fact that his market had some complex regulations regarding M&A.
Now, when he pointed this out to his boss, and suggested that he be given credit for this, his boss denied him the credit, saying that this was not part of his original KPI, and so he could not claim credit for his excellent performance here.
So, the question is, should KPIs be set once a year only, and not evaluated periodically?
3. The Actual Management Of The Evaluation Process
The example that I have here, is a sad one. The manager in question was not in the good books of his boss, who was very senior in the organization. The boss called the Manager to his office, and told him that, since his performance was sub-par, he was to be fired. When the Manager demonstrated that he had actually achieved every single one of his KPI points even though the year was not over, the Boss then said,”Ah, but we have not achieved our sales targets”, knowing that the Manager did not have sales in his targets, nor did he have the resources or power to influence sales.
While this is a stray example, this sort of behavior is more common than is normally acknowledged. The performance appraisal process is often manipulated, leaving employees extremely demotivated and, in some cases, fearful for their careers. A transparent process is normally not followed.
4. The Periodicity
Most performance appraisals take place once a year, with nary a conversation about the targets, during the year. I have seen very few cases, and I have been guilty of this myself, where the progress against the KPI is monitored regularly, and errant employees are counseled well on time. Neither does the performance appraisal process account for the interventions (training, mentoring discussions) that are required to build an employee. More often than not, training budgets are the first to go! Now, this is one area where corporations must learn from the armed forces, the fire brigades etc. Training takes place all the time, so that the organization is in a constant state of readiness.
We were told that a “new, improved, shiny process” was being rolled out, and that every thing would be transparent. All that happened, was that paper was replaced by an electronic system, without addressing the systemic flaws of the execution of the actual process.
Some people believe that the Appraisal Process should be abolished. It causes heartbreak and tension for the appraised and the appraiser.
I believe that, if it can’t be fixed, maybe, it should be replaced by a continuous process. Or, if not, then abolish it altogether.