With the start of a new year, we swing toward performance appraisal time in many organizations. Performance appraisals are rife with difficulties. Organizations have difficulty designing good systems and individuals have difficulty completing and delivering them to direct reports. Yet it is a highly important system. I like to say that the only thing worse than having a performance appraisal system is not having one.
A major advantage is the opportunity it provides an employee to think about his/her performance over the last specific period of time, most often a year. In the rush of day-to-day life, most of us do not put time aside periodically to think about how we are doing in our jobs. For me, the main value of the process is my own appraisal of my performance over the last year.
That does not mean the rest of the process lacks value, and receiving feedback from a supervisor offers an opportunity to see whether the two of you are on the same page and interpret things similarly. Even if you think your supervisor is completely wrong in assessing some aspect of your performance, it generally is better to know that. If you don’t know about it, you can’t do anything about it – either to change your behavior or to change your supervisor’s view of your behavior.
The tendency is for appraisal ratings to lean heavily toward the higher end of the scale. Without direct comparison with others your supervisor is evaluating or in similar units, it is hard to tell exactly where you stand. You may think, I got a “4” on a five-point scale, which seems good, but only if others did not all get “5”s. The size of any subsequent merit increase gives you some hints if you know what the mean or median raise is, but it is less valuable if you are not given this information.
The 360-degree system deserves an entry by itself, so all I’ll say is it has many virtues. Then there are the forced ranking systems that require supervisors to put certain percentages of their employees in each of the full range of categories, from ‘exceeds expectations’ to ‘does not meet’ them. Jack Welch popularized the approach when he was CEO of GE. It may work for a year or two because it forces people to take action against poor performers they have been reluctant to cut loose. But as the bottom rung is let go, then the next group up becomes the bottom rung. Then the next group up. The system becomes demoralizing for many because it serves up a large dose of dog-eat-dog competition. Why help your co-workers when any success they have makes them more likely to jump past you? – If I help you do well, then I am pushing myself one step closer to the bottom rung.
The thought of performance appraisals can generate a lot of groans. So next time around, rather than groaning about the process, ask yourself how you can use it to maximize the useful feedback you receive. But if you are in a force ranking system, groan away, you deserve the opportunity!