Performance appraisals are dead. Here's how to revive them

Performance review. Appraisal. Annual evaluation. Feedback.

Call it anything but the exercise where a professional’s performance is evaluated by her manager each year is - let’s accept it - one of the most “anxiety inducing” moments in her professional life, regardless of how well she knows her manager or how well she performed.

Organizations have tried various well-meaning approaches to reduce the anxiety and make the exercise constructive – with mixed results.

1.      Several have changed the periodicity – Instead of annual exercise, they have made it a continuous feedback exercise.

• The anxiety has merely shifted from one-time annual 440-volt shock to a daily 55-volt shock. 

2.      Some organizations don’t use the words “bosses” or “managers” or “HR” anymore – they are now called partners, enablers, buddies to reduce anxiety.

• The upshot? A rose by any other name smells as sweet, A boss or HR by any other name causes the same anxiety.

"My boss? I would like to go hunting with him sometime. I never miss my targets." - An employee

3.      A few organizations have gotten rid of one of the most infamous performance review models – the “80-20” or Bell curve.

• Bell curves haven’t gone - managers and HR merely found creative ways of ranking staff members.

4.      A few organizations have tried the constructive-feedback model – bosses have been asked to give feedback in the most constructive way possible to reduce anxiety and improve results.

• From “people-pleasing” bosses to “no-feedback” bosses, this otherwise well-intended exercise had often led to several casualties including continuous feedback just for the sake of the exercise.

"From the time we have implemented continuous feedback, one good thing I have realized is that my staff works well when under my constant 24x7 supervision." - A manager

Team coaching, skip levels – organizations are trying various approaches. Why are these well-intended exercises often not meeting their desired goals? What’s wrong with the current process. Let’s understand the science behind performance reviews. (Note - If you are busy, go straight to the end – although I would highly urge you to read WHY the science of performance reviews.)

Your brain and performance reviews

The human brain has three powerful areas which play an important role in reviews -

(NOTE - The functioning of the brain is extremely complicated– it has been simplified to suit the context of the article).

a.      Insula – a center that senses emotions and strengthens relatability. Centuries back, this center (along with others) has played a key role in helping us stay together and fight predators. 

•  The word CULTURE (personal, family, country or organization) arises primarily due to the functioning of the insula.

b.      Default mode network (DMN) – While you want your group or your team to succeed (courtesy the insula), you also want YOURSELF to succeed personally. The DMN is the selfish YOU in action – it always thinks about YOUR interests, YOUR desires, others action that affected YOU, how YOU will respond to scenarios etc. If you ever found yourself thinking about past or envisioning the future, your DMN is in action. 

c.      Anterior cingulate cortex (ACC) – When you stay and work together, you are bound to have situations that don’t go YOUR way - someone doesn’t respond as expected, feedback or reward isn’t in line with expectations and so on. The ACC is the primary circuit in the brain that detects such unexpected situations or errors. The ACC’s job is to activate your Flight or fight center (F/F) of the brain to fight the error-causing agent or to run away if fight isn’t possible.

•  If you have ever been disturbed (agitated, frustrated, angry upset with something or at someone), you would have realized you were thinking the disturbing episode endlessly, playing up the past or planning the future course of action. all this is due to your DMN, ACC and “F/F” of the brain that are firing in unison like gangbusters.

All these areas worked VERY well and ensured that humans survived (and thrived) for centuries. However, these very brain areas are the protagonists in modern day challenges including during performance reviews.

What happens during performance reviews?

All through the year, you have been working with your colleagues and boss (Your insula has been active). All along, it is obvious that to you that YOU are ALWAYS a good performer (courtesy your DMN which always thinks in your best interests, blanks out your blind spots and shows you that OTHERS are not as good as YOU are). Come performance reviews and you are expecting a GREAT reward and rave reviews thanks to your DMN’s assessment of you. Unfortunately, here comes your boss and delivers your review that is out of sync with your expectations. Regardless of how constructively this feedback has been delivered or how frequent or continuous the feedback has been, your ACC lights up in a split second, detects something is wrong and activates your “F/F” which positions your boss and HR as predators (lions, cheetahs or whatever) out to kill you. You are now ready to fight (argue, convince, debate, shout or even physically assault) or run away (defensive, cry, non-communicative, passive aggressive). At best, you will show fake “maturity” i.e. you will silently accept the feedback with a fake smile on your face and socialize with your boss – this is “destructively constructive” feedback at its best. At worst, you will fight with your spouse or kids, spend sleeplessly nights and stay disengaged at work or quit your job.

The performance review is now a wasted exercise and unlikely to bring any change in anyone.

Using brain science for optimal results

To ensure optimal results from performance reviews, we need three things in PARALLEL-

1.      The error circuit – the ACC in your brain - should stay silent. Errors are the difference between EXPECTATIONS set by your boss and RESULTS assessed by self.

• If you are in 100% in control of the expectations from your review, your ACC stays silent.

2.      The F/F of your brain should stay silent.

• If your performance is compared with YOUR own past performance instead of that of your peers, you are likely to be in 100% agreement with the assessment. Your F/F stays silent (The flight or fight center never fights itself, it fights others – so NEVER compare with others).

3.      The DMN should be minimally activated – else it will keep rolling in blind spots and assessing others as idiots.

• If you are in 100% confident of the fairness of the assessments, your DMN center wont bother you.

What all this translates to is –

The highest bonus, finest perks, top results, public recognition, maximum benefits, constructive talk aren’t a precondition for great performance reviews. Instead, a sense of control in the goal setting and review process combined with a feeling of fairness in assessments are the two vital needs for optimal reviews.  How do you achieve that if you are a leader? By moving away from being the center of attention and instead making your staff member the focus. Here's how.

1.      DON’T SET goals for your staff. Just facilitate the process.

• People hate if you “SELL” your goals to them – instead they love when they “BUY” their own goal themselves.
• The real job of a leader in goal setting is to facilitate the process such that individuals buy the goal and feel that they have set it themselves rather than go with a feeling that the boss has set it for them.
• Done in a group, it has been consistently found that individuals – with their sense of self pride - will almost always take up more (quantity) and challenging (quality) goals if they set it themselves than if their boss sets it for them.

2.      DON’T force your evaluation on your reports – people hate the unfairness of a higher authority assessing them. Instead, allow them to assess it for themselves as you facilitate transparency.

• Individuals will almost always evaluate themselves fairly (and even accept their areas of improvement) in a group if others are equally fair.
• The real job of a leader in goal assessment is to bring in this fairness and transparency as people assess themselves.
• NEVER allow people to compare their performances with others – ask people to compare their work to their own a while back. 

3.      Start with yourself, if you are the leader.

• Start the exercise by sharing your own goals. Allow people to assess you Vs goals and express your gaps.
• The brain’s sense of fairness and transparency drastically increases while simultaneously threat perception drastically reduces if the leader faces the same treatment as the rest. 

Performance reviews dont have to be as dreaded as they are today - it is a question of adapting to fourth industrial revolution.

Everything around the world is changing rapidly. So also should the performance appraisals process.

With inputs from Sally and Lucy from Fortune 500 organizations who have implemented the approaches in this article and achieved excellent results. 

What has your experience with performance reviews? I would love to hear from you. Please leave your comments in the box below.

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Raja Jamalamadaka is a Harvard educated TEDx and corporate speaker, entrepreneur, mentor to startup founders, board director, member of CXO search panels and winner of "Marshall Goldsmith award for coaching excellence" for being top 100 coach to senior industry executives. He was adjudged a LinkedIn Top Voice 2018 for being one of the platform's most insightful and engaging writers. His primary area of research is neurosciences - functioning of the brain and its links to leadership attributes like productivity, confidence, positivity, decision making and organization culture. If you liked this article, you might like some of his earlier articles here:

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