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Banished InquisitionIs it time to do away with yearly employee reviews?By Ellen Paris

No one likes performance appraisals: Employers dread them, while employees fear them. According to Tom Coens and Mary Jenkins, co-authors of Abolishing Performance Appraisals: Why They Backfire and What to Do Instead (Berrett-Koehler), appraisals are flawed and inaccurate and don't motivate employees. "Traditional appraisals have so many negative unintended things attached to them, like stress and fear, and they often put a chill on relationships," says Jenkins. However, don't go too far: Jenkins considers basic appraisal functions like feedback, coaching and career development important. But Jenkins and Coens say these functions should be "unbundled and assessed separately on a continuous, real-time basis." Jenkins and Coens suggest sacking all annual appraisals. Instead, try ongoing, two-way feedback among employers, managers and employees on how well the company is doing as well as dialogue about individual careers. The authors say compensation should be a stand-alone issue and suggest gain sharing and performance awards, where all employees share in the company's success by receiving extra income based on a ratio of their annual salaries. Glenroy Inc. of Menomonee Falls, Wisconsin—which manufactures packaging materials for the medical, food and personal care industries—gave up annual performance appraisals years ago. "We are more involved in [constant communication] instead of saving things up for a year and then springing it on them," says Jim Daugherty, Glenroy's vice president of finance and administration. After all, he says, you wouldn't do something like that in your personal life: "You wouldn't save things up and then spring them on your family members; this works the same way."

Q: I know big corporations and large companies use a myriad of profiling tests designed to evaluate talent and personality factors. As a small-business owner, I can't afford to use these tests. How important are talent and personality factors in increasing an individual's productivity? A: The fact that you can't afford to do a lot of testing is probably a good thing. Although I do believe businesspeople can learn from some tests, I don't believe personality tests are helpful. Achievement tests, which measure academic and job skills and should not be confused with intelligence tests, are probably the most helpful. Your question indicates to me that you're concerned with productivity. If you are, the solution to your problem doesn't lie in either an employee's talent or personality. Let me first deal with talent. Dr. K. Anders Ericsson, a professor of psychology at Florida State University in Tallahassee, has studied the subject of expertise for many years. He's examined every conceivable activity where it's possible to measure expertise, from figure-skating and playing chess to practicing medicine and law. In all the areas he's studied, he's found that talent plays an extremely small role (less than 4 percent) in whether someone becomes an expert in a certain field. Rather, the critical factor is practice. What this means is that almost anybody can be successful if they work hard enough and long enough. So if you're having performance problems with an employee, forget about talent as a limiting factor. Two things that you should consider when analyzing performance problems are: Do you know that the person can do what's necessary to do the job well? Has he or she ever done it consistently? If the answer to either one of these questions is no, you probably have a training problem. If, on the other hand, the answer is yes to both, you have a motivational problem. And that brings me to personality. In order to motivate someone, you don't have to know their personality; you have to know what they want, like and value. In my books, Other People's Habits and Bringing Out the Best in People, I show how to use positive reinforcement to get discretionary effort. I find that many people think they're using positive reinforcement effectively when they're not. Look first at your behavior. When do you talk with your employees? Is it only when there's a problem? Or, if you tell people they're doing a good job, is it when they're complaining or not doing what you want? If yes, that means you're reinforcing what they're doing at the moment—undesirable behavior—instead of reinforcing desirable behavior you want more of. The time you choose to reinforce is as important as whether you reinforce—you need to deliver positive reinforcement when employees are being productive so they'll associate being reinforced with doing a good job. So rather than focusing on talent and personality, look for those small accomplishments to reinforce every day, and you'll be on your way to creating satisfied, productive employees. Aubrey C. Daniels, Ph.D., founder and CEO of management consulting firm Aubrey Daniels & Associates (ADA), is an internationally recognized author, speaker and expert on management and human performance issues. For more about ADA’s seminars and consulting services or to order Aubrey’s book Bringing Out the Best in People: How To Apply The Astonishing Power of Positive Reinforcement, visit www.aubreydaniels.com, or contact Laura Lee Glass at (800) 223-6191 or .

Appraising the Performance Appraisal

If you’ve got something to say to employees, spit it out—don’t wait for their annual reviews.

Q: I've been in business for a couple years and have never done performance appraisals for the few employees I have. I'm beginning to think I should, as I have one or two employees who are not performing to my expectations. How should I handle this situation?

A: I read recently that Jack Welch, former CEO of General Electric, said that if you want a high-performing company, you should fire the bottom 10 percent of your employees each year come performance appraisal time. We have 55 employees. That would mean that I should fire five or six people every year. Is this effective in a small business?

No, this practice doesn't work for either a small or a large business. Given its tremendous success over the years, GE obviously does a lot of things right—but that is not one of them. If employees are not doing their jobs, that should be dealt with in a timely way. You should certainly not wait until performance appraisal time to terminate someone who isn't performing satisfactorily.

And do not copy the performance appraisal methods of large companies. I know of none that do it well. Some large companies have done such a poor job of dealing with poor performers; they've resorted to paying them to quit. A large bank did this recently and was sued by an employee who claimed that he was a poorer performer than someone who had been terminated. His suit claimed that he deserved the "firing bonus." Any organization that has to resort to these methods of dealing with poor performers has serious management issues.

Some experts, in fact, recommend eliminating the performance appraisal altogether. I agree. The people who get them don't like them. The people who give them don't like them. Why would we do something that no one likes or thinks is effective?

More important, the research on performance appraisals has never shown that they improve performance. Why, then, are they so prevalent in the workplace? The answer I get in my seminars is that they are a way to document poor performance—in other words, a step in the firing process. This practice is coming under increasing scrutiny. Class action lawsuits being brought against several large companies claim that appraisal systems are discriminatory. I believe the companies will have a difficult time proving they aren't when they have mandated that a fixed percentage of employees be given the lowest score-and fired. In most organizations, it would be almost impossible to show that there was a significant difference between the first person to be fired and the lowest-scoring person who was kept on the payroll.

Let me suggest that the best performance appraisal is one that is done every day. While this may seem onerous for a small business, it's becoming increasingly necessary, not just as a way to justify a raise or a termination, but because it will allow you to do things that will increase performance and morale. Measurement allows you to see small changes in performance so that you can do things in a timely way to either correct performance or to provide positive reinforcement for improvement or for a job well-done. The best outcome for your company is to have all employees doing their best every day. Your success should be measured by the percentage of employees that you make successful, not by the number that you fire.

Aubrey C. Daniels, Ph.D., founder and CEO of management consulting firm Aubrey Daniels & Associates (ADA), is an internationally recognized author, speaker and expert on management and human performance issues. For more about ADA’s seminars and consulting services or to order Aubrey’s book Bringing Out the Best in People: How To Apply The Astonishing Power of Positive Reinforcement, visit www.aubreydaniels.com, or contact Laura Lee Glass at (800) 223-6191 or .

From India, Bangalore
Ed Llarena, Jr.
89

Hi!

My experience and discussions with people who do not like or hate employee reviews (or performance appraisals) are people who are not in top management decision level. Many of them are people who have not done enough to eliminate the many and usual complaints against appraisals.

In the US, discussion groups (e.g. HRNET) have repeatedly been talking about this. All you get are biases by people who, i think, are victims of bad appraisals during their rank and file times.

What some people fail to understand and do is that appraisals will be difficult, if not impossible to do away with.

Appraisals are the only "credible basis" used by organizations in the rationalization of recognition, rewards, and penalties. Individual superior informal feedback are "suspect" of bias and can't be used in labor related litigations, esp. when it comes to dismissal or termination cases.

One can only do away with appraisal if you are the owner of the company. But when you are just a "hired professional", you will do what the business owners tell you to do. And ONE of the many things that business owners want to know is whether the people they are paying are doing their jobs according to expectations.

And the only way to do that is to review, assess, and measure what the "hired hands" have done. And, HRD, unfortunately, is the group normally tasked to do this.

Doing a one on one daily assessment and coaching is only possible in very small organizations, like a consulting outfit whose employees would not even reach twenty. What if your ccompany has more than a thousand or several thousands employees whose names and faces you can't even remember?

Best wishes.

Ed Llarena, Jr.

Managing Partner

Emilla Consulting


From Philippines, Parañaque
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