Just how effective have your annual performance appraisals been?

In part one, I introduced the theory used to logically support the use of annual performance appraisals. 'Theory X' and how employees are generally not to be trusted, need controlling by managers.

How does that make you feel as an appraisee? Make you want to perform?

Appraisal quick fire

Let's ask some questions about appraisal to see how effective and impactful they are:

• Does the appraisal evaluation lead to improvement in employee performance?
• The employee has complete control over the results they contribute to?
• In teamwork, it is easy to identify the actual contributions of each member of the team, managers and rest of the organisation?
• Any process is identical regardless of who is performing it?
• The evaluation is based on standard factors relevant and important to the customers and organisation?
• Is it possible to identify accurately and objectively performance that is above or below average?
• Is the process or system stable and capable of achieving the results expected of the appraisee?
• Are the appraisers consistent with each employee?
• Are the appraisers consistent with each other?

Naturally, the answer to any of these questions should be yes. However, the answers are either 'no', 'not always', 'it depends', 'how is it achieved?' ("by what method?" as Dr Deming liked to ask).

Take the question about consistency of appraisers with each employee or each other. All people are different (variation), affected by psychology, give different perspectives and knowledge (elements that comprise System of Profound Knowledge).

Are we convinced that performance appraisals are flawed?

In case we are not convinced, how about some more points:

• So far, there is no evidence that appraisals lead to better performance or outcomes.
• Individuals and groups are the focus and considered to be the drives of improvement. However, the majority of problems or improvement opportunities relate to the process or system itself.
• Appraisal provides judgement in a hierarchical manner rather than provide feedback.
• Appraisal is often linked to some incentive, such external motivators work for simple short term initiatives. Be warned, taking away such incentives has a rebound effect and demotivates employees. Better to not have offered them in the first place.
• Appraisal focuses on individual interactions between the employee and appraiser/manager rather than interdependent interactions between team members. Very few of us work solely and independently of others in some form of team work.

Peter Scholtes summarised appraising teamwork performance as 'confounded by counter-teamwork'. Teams working together in an organisation are often rewarded for successfully competing with other teams.

You might have heard the expression "robbing Peter to pay Paul"?

Dr Deming would talk about optimising one part of a process or an organisation with the consequences of sub-optimising another part of the process or organisation. A failure to appreciate the inter-dependency of a system, giving us another link to System of Profound Knowledge.