Wednesday, May 4, 2011

Performance Appraisals what have we learned in 50 years?

I've got to write my personal Performance Appraisal Goals & Objectives.  So in the process I thought I'd see what experts think about the whole system.  It appears that the system of performance appraisals crossed the chasm back in the 1950s.  Peter Drucker's Management by Objectives (MBO) spurred on this new technique.  Previous to WWII very few companies used this technique, the military did.  Going back even further the Civil Service Commission's system was in place back in 1887  (from Dick Grote's "The Performance Appraisal, Question and Answer Book").


McGregor's 1960 book  "The Human Side of Enterprise"  introduced the Theory X & Theory Y concepts of management. McGregor writes in Harvard Business Review (1957):
  "Effective development of managers, does not include coercing them (no matter how benevolently) into acceptance of the goals of the enterprise, nor does it mean manipulating their behavior to suit organizational needs.  Rather, it calls for creating a relationship within which a man can take responsibility for developing his own potentialities, plan for himself, and learn from putting his plans into action."
 In 1960s General Electric conducted a scientific study of the effectiveness of it's annual appraisal system.  McGregor had singled them out as a company that was using the Theory Y approach.  Yet GE still found their system had concerns.
  • Criticism has a negative effect on achievement of goals.
  • Praise has little effect one way or the other.
  • Performance improves most when specific goals are established.
  • Defensiveness resulting from critical appraisal produces inferior performance.
  • Coaching should be a day-to-day, not a once-a-year activity.
  • Mutual goal setting, not criticism, improves performance.
  • Interviews designed primarily to improve a man's performance should not at the same time weigh his salary or promotion in the balance.
  • Participation by the employee in the goal-setting procedure helps produce favorable results.
  • -- D. Grote, Performance Appraisal, page 4.
Note the language is from the era before equality of the workforce (..."a man's performance"...).



The point on coaching is an interesting one to me.  Assuming that a manager spends a whopping 6 hours a year per person on the performance appraisal, then they have only consumed 0.3% of their time coaching on the performance appraisal.  Tell a manager they will spend 6 hours per person and watch them squirm out of that requirement.  How many system's address performance more than once or twice a year?

See Also:

Management 3.0 #Workout - Feedback Wrap by J. Appelo - "This chapter dives into the solutions for companies that support trust-only work environments. How do you keep connected and increase team collaboration? How can you provide feedback? How can you increase employee engagement?"


Why Leaders Need To Stop Using Performance Reviews by former Disney executive Ken Goldstein. "They are obligatory, perfunctory, dreaded time sucks for both giver and receiver, putting a check mark in an annual rite of passage that is largely ignored until the Earth completes another full orbit around the Sun."

Do we really need performance management? by John Wenger

Get Rid of the Performance Review! by Samuel Culbert

Employee feedback: How to make it less painful - “The first thing I would do is kill the performance appraisal system,” Burbage said. “I 100-percent guarantee you that everyone at your company hates it.”

HBR: Why Your Brain Hates Performance Reviews by Gretchen Gavett

Why Performance Reviews Are a Waste of Time and Money  (Inc.com) Want to help your employees improve their performance? Start by getting rid of traditional evaluations.

What to Do After a Bad Performance Review by Carolyn O'Hara of HBR

Reinventing Performance Management by Marcus BuckinghamAshley Goodall of HBR


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