Performance Appraisals

The Ideology of Performance Appraisals.

?What’s with the working majority in not knowing or not understanding or simply not conveying what they understand….I’ll leave that statement open ended….? And what’s with not explaining what Change is all about or what “Performance Appraisals” mean to you or me or to company we work for.

?OK…here we go. This needs to be a slow start as I am still gathering my thoughts as I think faster than I wright and where I speak slower than I think. ?

?What is absolutely and fundamentally key to understand is that “Performance Appraisals” are the means to your career development. The ideology behind the theory is “you”….to build you and improve your skills. That’s the idealism. Therefore, idealistically, effective performance appraisal methods not only help the you grow, but also the company you work for or represent. That’s the added value that your company needs to capitalise on and should not be the main thrust of focus of the Performance Appraisals System. Sadly, this is not always the case.

?From here on in I’m going to refer to you in the third person. It makes it somewhat easier without the emotional involvement….but I’ll get to that later.

?If the employee is given feedback regularly and frequently, the organisation will be at the receiving end of employee initiative and will profit from their endeavours if correctly motivated. Performance reviews are important because they help identify and set goals for the employee, recognise performance over time, guide progress, identify the problem areas or weaknesses, improve performance and discuss career development in the company. Idealistically, therefore, companies should give promotions and appraisals frequently because it keeps the employees motivated to perform better, thereby maximizing the efficiency of the employee, and the productivity of the company.

?There are a number of different “performance appraisal” systems and employee measuring systems out there. These are the main Four that I have highlighted below.

?1.??????Management by Objective.

?An interactive and fair form of appraisal, the “Management by Objective” method is less time consuming and of course cost effective. The technique involves setting up of objectives and goals for the employee either by the employer, or his manager, or both employee and employer. This performance appraisal method helps the employee to perform better, because he is well aware of his goals and already knows the quality and quantity that needs to be delivered. It has been observed that when both employee and employer together decide the objectives, the probability of the individual meeting the goal is much higher. This is a fair method of evaluating because the employee knows the odds that he is measured against. It doesn’t involve giving constant feedback to the employee, because he is being constantly self-introspective, thereby saving time and efforts of the employer.

?2.??????Rating Scale.

?There is much to say on the different rating scales. I think the most important part to comment in is that it has to be equitable to both parties. A graphic rating scale lists the traits each employee should have and rates workers on a numbered scale for each trait. The scores are meant to separate employees into tiers of performers, which can play a role in determining promotions and salary adjustments. However, the scale has disadvantages that make it difficult to use as an effective management tool. This performance appraisal method can be used by start-ups and small businesses that are scaling and are trying to set up processes in place. It is process-based and involves the organisation to set pre-determined objectives that employees are expected to meet. Individuals are then rated by their supervisors or managers. It is similar to the grading system that is usually followed in schools but is effective and systematic. Employees are evaluated for their skills, teamwork, communication skills, precision, etc. And they are expected to meet a basic score. If they do not meet the score, then they are sent for performance improvement training which would help them cope up with their shortcomings.

?·??????Considerations

If a company uses 17 people to evaluate their staff, the effect may be 17 different rating scales. Even with intense training, some evaluators will be too strict. Some will be too lenient, and others may find it hard to screen out their personal agendas. Rating scales work best when managers and employees agree on the definition and degree of factors included in the evaluation, and that's difficult to achieve.

?·???????Employee Perception

No matter how the rungs on the rating scale are labeled, what is meant as a compliment by the evaluator - "you sometimes exceed my 'high' expectations" - may sound like a C+ to the person being evaluated. And C+ sounds way too average to most employees.

?·???????Feedback Block

Employees may not hear the positive feedback in any essay part of the evaluation because they're fuming at a rating-scale grade they perceive to be too low. They may also miss the suggestions for improvement because they're basking in a grade that suggests their work is already superior. A rating scale becomes an obstacle to substantive give-and-take about an employee's work.

?·???????Misleading Scores

Adding up to a final score assumes that an exceptional strength in one area can mitigate deficiencies in others. Evaluators may allow the "halo effect" to skew the evaluation, letting an obvious strength subtly boost ratings in other areas, and visa versa.

?·???????Middle Muddle

Graphic rating scales have proved best at identifying the very best and the very poor employees. Because evaluators find it safer to operate in one zone of the scale, it becomes difficult to differentiate employees who land in the middle group, especially when those employees have different combinations of strengths and weaknesses. This is commonly known and referred to as Management by Exception.

?·???????Proximity Problems

Even with repeated cautions and admonitions to maintain performance evaluations, evaluators (management) may overweight employees' most recent behavior in performance reviews. Two employees might have the same number of errors over the evaluation period. However, an employee who has had a recent rash of miscues typically is judged more harshly than one who hasn't.

?·???????Natural Biases: Human assessment are subject to natural biases that result in?“rater” errors. Managers need to understand these biases to eliminate them from the process.

?·???????The Scale: The 5-point scale made it easier to differentiate performance between employees. It is important for employees and managers to agree on objectives that can be measured, quantitatively or qualitatively, so there can be an objective differentiation. Each objective is given a number and the overall rating is averaged. I stress SMART Objectives (Specific, Measurable, Attainable, Relevant and Timebound).

?1 = did not meet key objectives

2 = met some key objectives

3 = met key objectives

4 = exceeded most key objectives

5 = significantly exceeded key objectives

?·???????On the Academic Side of things. This is what I call “Marmalade” some call it Jam. This is the Honey of understanding.

First of all, using a 5 or a 7-point scale is more likely to produce higher mean scores, relative to the highest possible attainable score, as compared with the 10-point scale, which is more likely to produce lower mean scores, relative to the highest possible attainable score. This means that using a 5-point rating scale may give the impression that satisfaction levels, for example, are overall higher than they are in reality.

Another common challenge comes with using bipolar or unipolar variables. These are pretty common, found in many current performance measures, such as Customer Satisfaction, Customer Experience, etc. A bipolar variable is a variable which describe attitudes that can fall on either side of a midpoint, which is truly ambivalent or neutral. Having a bipolar or unipolar variable can influence the choice over what type of scale is best used.

If the purpose of the research prompts using a bipolar variable (for example, rating your satisfaction for a certain product or service, from complete dissatisfaction to high appreciation), it is recommended to use a higher point scale, rather than the 5-point version, in order to obtain perceivably skewed answers. Using a 5-point scale commonly leads people to rate four or five. Many of them will never rate anything as a “5”, resulting in having “4” include both the impressions of those which are really very satisfied and those which are only somewhat satisfied. This is otherwise known as the topping effect. A recommended practice for avoiding this unwanted outcome is using at least a 7-point scale. Using a 7 point or 10-point scale will also allow for easier analysis of what bottom-line effects satisfaction has, given that statistics tools, such as regressions, work better with a more granular score (a general score, or response, which is broken into several, smaller specific aspects).

It is argued that the 5-point Likert Scale is too blunt to detect differences between items and to precisely measure specific opinions, as the respondent’s true opinion can lie in between the answer categories.

Although using a 5-point Likert Scale can determine users to provide responses between two points, statistics ensure a way for these errors to cancel themselves out. The assumption is that the number of times one over-rates an experience or performance will be met with an equal number of under-rates. It is likely that the responses which are forced into higher numbers will be canceled out by those forced into lower numbers. From this point of view, using a 7-point scale will likely offer a small benefit over the 5-point version. This benefit will likely only be significant if you have fewer response items (less than 10) and very large sample sizes.

In turn, the 10-point scale offers a large number of choices and options for respondents, but it can also be very frustrating to have a battery of questions with 10-point scales.

Another noteworthy attribute of the very popular 5-point scales is that they tend to distribute results evenly, from the positive to the negative end of a continuum, while 7-point scales tend to distribute results skewed either positively or negatively. This means that you will have a better chance of accurately registering a generally positive or negative response to your performance, if you opt for a moderate response scale, which has 7 levels of agreement.

More than 7 levels of “agreement” cannot be considered in one instance, which makes scales with more than 7 points difficult to respond to. They are fatiguing, depriving the mind of the chance to embrace the scale as a whole and accurately select from an array of balanced alternatives. What does the mind do with a 10 points scale? It breaks the scale down it into a positive and negative half in an attempt to establish where to place a response – an especially frustrating decision if the respondent’s opinion is somewhere in the middle.

Another factor that influences the respondent is the scale’s labels, which are essentially the expressions of the levels used on your scale. Studies have shown that scales marked “1 to X, with X being the highest” result in less accurate results than scales with labels such as “good” or “poor”. When using numbered scales, signposts are recommended.

• Added insight:

I used to look at see this tree from my driveway coming home every day. It, practically, sings with vitality and life; in spring and summer its leaves are glossy green with health, and the patterns of sunlight falling through its branches create a kaleidoscopic display of jewel tones and velvety shadows. The reds, golds and oranges of Autumn are so brilliant you can almost smell them. Even in winter, there's a stark elegance to its naked form.

But it's not symmetrical - one side is fuller than the other.?I suspect that when it was part of the forest, before its neighbours got cut down. I suppose it had access to more sunlight on one side, and so grew in that direction.

Its asymmetrical shape doesn't make our tree less beautiful; in my eyes it adds to its unique charm.?Its shape has naturally arisen from the tree's response to its circumstances: if we trimmed it to conform to some rigid, limited construct of perfection, it might look neater, but it wouldn't be as beautiful - or as strong.

Which brings me to my actual point.?I read a very good article by Fred Allen, about why?MICROSOFT has lost its mojo over the past decade. (Fred's article is a summary of an article in the latest Vanity Fair by Kurt Eichenwald.)?The main culprit seems to be a management technique called 'stack ranking,' a futile and destructive exercise in trying to make employees conform to a limited, rigid construct of perfection - and, in fact, 'pruning' them to fit.

Here’s the Kicker and how it works.

With stacked ranking every manager is forced to rank a certain percentage of his or her employees in each of four performance categories: 'top,' 'good,' 'average,' and 'poor.'?So, let's say one team has 10 people who are rock stars, and are knocking it out of the park every single day - innovating like nobody's business.?The manager has hired great people, given them the resources they need to succeed, supported and developed them consistently - it's a superior leader and manager and a superior team.?And let's say there's another team of 10 that's not so hot: they're meeting their objectives, but just.?The manager is OK - not great, not terrible.?On both of those teams, 1 person would get a stellar performance review, 4 would get good reviews, 4 would get mediocre reviews, and 1 would get a, really, negative review.

Imagine you are on the fantastic team. What impact would it have on you to know that, no matter how amazingly well your whole team did - only 1 of you would get a performance review that reflects that??Unless you are a very unusual person, it would be deeply demotivating, and it would almost certainly force your attention toward how to show that you're better than your colleagues, and away from how you can support your colleagues and the team to succeed.

Human beings, like almost everything other living thing on the planet, thrive in response to consistent support and the removal of obstacles.?Forcing them into artificial and arbitrary constraints is generally doomed to fail.

"Stack ranking" is only one example of this kind of wrong-headed management…. don’t get me wrong - I'm not suggesting a free-for-all.?If a tree has a dying branch, you should prune it off, so it doesn't tax the tree's resources, infect other branches, or fall on somebody's head.?But if a tree is healthy, beautiful, growing well...don't cut it up.?We, need to clearly define what great performance looks like: support, develop and reward those who perform well (both individually and in teams).?When people don't perform well, provide clear guidance about what's expected of them. Give them the guided chance to improve, and if they can’t, try again and if on the third time round there is none….- let them go.

3.??????Self-Evaluation Method.

?The self-evaluation method gives employees a template to rate themselves on skills and goal achievement. It is often completed in conjunction with other evaluation methods to get a stronger idea of any gaps that exist.

?The benefit of the self-evaluation method is that you get into the mind of the employee. Managers don't always see a low-performing employee as a highly aspiring employee. The self-evaluation also gives employees a chance to define their own goals in professional development, achievement and promotion. Managers can identify motivated individuals with this method. Because the employee is creating the appraisal, there is usually more engagement regarding solutions, action plans and next-step goals.

?The self-evaluation method isn't without problems. Employees may not have a solid sense of self-awareness to provide quality information, which is why this method is usually not an exclusive appraisal. Some employers also find some employees are not forthright in the evaluation, creating concerns about the accuracy of the evaluation

?4.??????360 Degree Feedback.

This method involves getting a feedback about the employee from every individual who interacts with him during his working hours. They can be his peers, his subordinates, his superiors, customers who have interacted with him and even he himself would be interviewed about his perception of himself and his duties at the workplace. This performance appraisal method would be very useful for start-ups, because the best way to review an employee’s overall performance and get an insight about his behaviour, personality and attitude this is the best method to follow. Although it is a little time consuming, but it is cost effective and precise. It keeps biases out of play due to multiple opinions, so that the review isn’t affected by biases of one person.

?In Closing:

?Performance appraisals are only as good as the performance management system it operates within.?Organizations that only do performance appraisals for the sake of doing them are wasting their time, and those that do it for the sake of doing them do them for their own gratification….and that without measure. However,?organizations that incorporate performance appraisals into a comprehensive performance management system?and use them?to implement?business goals?have a distinct advantage for accomplishing their goals and ultimately their?strategic plan. This strategy is based on Change Management fundamentals and with collaboration from all involved and is not based on a management by exception organizational structure.

?Ps: On a personal note, and one more to myself that to you (the reader) …. I’d love to get your sense of why these mechanistical, and artificially constructed management techniques are so popular - and what I can do to make them go away. Not everything you understand is beneficial to you.... BUT this is just my vivacious opinion.

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