The End of Performance Reviews

Since it's "that time of year" when many organizations go into their year-end cycle of reviews, it seems appropriate to stir the pot on Performance Reviews.

Chief Happiness Officer and blogger Alex Kjerulf recently gave the pot a good stir with his entry called "Performance Reviews Are A Big Fat Waste of Time."

At the Mass Bay OD Learning Group, Jim Murphy has posted an intriguing question: "What is the OD view of performance management?"

As an OD Guy, I try to look at performance evaluation processes as objectively as I can, while recognizing that I do have a personal bias about them.

To adopt a more objective view, I could put on Deming's cap and ask, "Does this performance evaluation scheme promote or erode the values of Quality that Deming cared so much about," e.g.

- customer focus

- systems thinking

- teamwork

- process improvement

- fact-based decision making using measurement

- how employees are treated, motivated and developed

If the performance management process supports these values, it's a good thing. For instance, if it enhances how employees serve the customer, that is clearly a benefit to the organization as well as to customers and other stakeholders.

If it detracts from these values, it is a danger. For example, if it diverts employees from a focus on the customer to some other organizational value such as jobs-per-day, then productivity may increase while customer satisfaction (not to mention employee morale) may fall.

From my standpoint, the Deming position is a great way to get into a discussion of management's responsibility for stewardship of people.

Just as management is responsible for the utilization of the organization's financial resources, so also is management responsible for the utilization, and development, of the organization's human resources.

What makes this stewardship of people unique is the development aspect. This stewardship of development is operationalized through such processes as orientation, communication, mentoring, delegation, training, coaching, disciplining, giving feedback on performance.

Who is in the best position in the organization, to observe, and judge, the execution of this stewardship? The employees who receive (or do not receive) it.

That's where upward feedback comes in. Upward feedback is the process whereby subordinates give their boss feedback on how the boss is doing. For this feedback to be most useful, it needs to be structured. That way, the boss gets actionable input.

Far too much emphasis is placed on downward feedback (aka traditional "performance appraisal") in most organizations, with relatively little attention paid to how the boss is doing.

So, to wrap up, there are a lot of problems with performance review processes and
practices (see Alex' post for a good rundown).

The great W. Edwards Deming wrote that evaluation of performance, merit ratings, and annual reviews of employee performance comprise the third of his "Seven Deadly Diseases" of management. Why? Because there is often a conflict between these practices and the values of Quality.

Among the values of Quality that Deming cared so much about was how employees are treated. For Deming, the motivation and development of employees was tremendously important, yet very difficult, requiring a high degree of focus and skill on the part of supervisors and managers.

To the extent that an organization's performance management process supports the development of people through training, mentoring and coaching, it's a good thing. To the extent that it drains and demotivates people, it is a danger and should be considered a candidate for the corporate scrap heap.

Posted by Terrence Seamon, Feb 2, 2008


chris said…
Mary Poppendieck at Agile Bazaar (1/31/08) on performance appraisals
Terrence Seamon said…
Thanks for the pointer to Mary's ideas, Chris.


Anonymous said…
All over the world we are talking about what should be done. Time for us to start highlighting positive organizations who have made a start.

It would be so nice if by Christmas we could collectively point to a list of 20 organizations we sincerely believe are well run and good places to work.

Is anyone up for the challenge? To find 20 organization who care about what is true and good, better and possible?
Terrence Seamon said…
Hi Jo,
I like your challenge to find and highlight organizations that are embracing a positive view of people and their potential, that are well run and good places to work.

I'll post this challenge as my next blog entry.

Anonymous said…

I read this post two times.

I like it so much, please try to keep posting.

Let me introduce other material that may be good for our community.

Source: Staff performance evaluation

Best regards

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