Why on Earth do we need performance appraisal? (Part Four)
"Managers don't like it"... "Employees don't like it"... "It takes a lot of time to do it"... "Too much administration"... "Performance cannot be assessed objectively"... the complaints about the process are endless. Probably it is the most debated managerial responsibility nowadays. - Still, I am convinced that there is a better way of doing it but first, we have to understand its role and purpose.
In the first part of this series, I was writing about the reasons why we need to evaluate performance, then in the second part, I summarized the common characteristics of performance appraisal systems, while in the third part I was dealing with how the appraisal helps us to build a growth mindset. This part focuses on the responsibility of leaders and managers doing the appraisal.
The system will be shaped by your leaders
One cannot introduce a uniform and fair appraisal system without the buy-in of the managers and leaders executing it. The system that you apply at your company and the way it is operated will SPEAK LOUDLY about the overall values, culture and attitude towards employees.
There is no system that will be welcomed and liked by everyone. It takes great effort, consistency and commitment from leaders to make the system function in a way that it creates added value and achieves the proper results. If managers don't believe in it, if they cannot think of the appraisal as a useful tool that helps them to develop their employees and clarify common values, then the system cannot be operated successfully.
There was an interesting experiment carried out by Maura Belliveau of Long Island University in the United States. I cite it from the book titled Work Rules! by Laszlo Bock (a fascinating reading from the ex-HR Vice President of Google):
184 managers were asked to allocate salary increases across a group of employees. The increase aligned nicely with performance ratings. Then they were told that the company's financial situation meant that funds were limited, but were given the same amount of funds to allocate. This time, men received 71 percent of the increase funds, compared to 29 percent for the women, even though the men and women had the same distribution of ratings. The managers - of both genders - had given more to the men because they assumed women would be mollified by the explanation of the company's performance, but that the men would not. They put more money toward the men to avoid what they feared would be a tough conversation.
Well, employees have all reasons and motivation for trying to fight for a better appraisal result, however, it is the manager's responsibility to resist this pressure and evaluate consistently and honestly. If the evaluation system is transparent and all leaders and managers have a unified opinion about it, and if they all apply the same rules and benchmarks at their appraisals, then chances for playing the system will be minimalized.
This is again something that will not go automatically. It takes some time and recurring discussions within the management team to "set the bars" and agree on a system that they can all operate fairly. Also, it is necessary to teach managers at all levels to be able to carry out evaluations properly and give appropriate feedback about it (see my previous post about the feedback that encourages a growth mindset).
It is important that managers evaluate achievement against the goals honestly and provide conscientious feedback to facilitate development.
In the next part, I am going to deal with the fairness of the system and the techniques that can be applied to have more honest evaluations. Stay tuned!