Jason Lauritsen - Crushing talent dogma to free human potential

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Performance Appraisals Must Die

As every other HR department has done before and will likely do again, my team is working on answering the question, “What should we do about our performance appraisals?”  So, I’ve been thinking a lot about the topic lately.  That means I’ve had my radar up for information and solutions about performance management.  It seems to me that the performance appraisal is a perfect example of how Paul Hebert explains that HR is caught in the monkey trap.  Letting go would set us free, but we just can’t seem to do it.  I think that’s a mistake and here’s why.  

This is what I have found to be almost universally true when you talk to people about performance appraisals.
  1. Managers hate writing them.  Even the best managers hate them, regardless of the form you use.  Too much work for what they get out of it.  
  2. Employee hate receiving them.  Regardless of how great of a manager you have, the process of the once a year sit down is riddled with anxiety and angst.  
  3. HR hates administering them.  It’s an enormous black hole of time and energy, and no one loves you for doing it.  
  4. There is no evidence that traditional performance appraisals have any impact on performance, good or bad.  At least I’ve not found anyone who has any data either way.  
  5. Despite what some HR folks may argue, having annual performance appraisals usually makes it HARDER to terminate a low performer because most managers generally resist addressing performance issues within the appraisal itself. 
If these five things are true, it would seem that the solution would be to stop the insanity and pull the plug on performance appraisals.  Here’s what should happen if you do.  Managers and employees both love you more.  Your HR team gets back some time that can be invested in work that matters.  Organizational performance won’t change and you’ll be better able to swiftly address employee performance issues.  Where’s the down side?  
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  1. Cyndy Trivella

    Thank you Jason! I concur and see that you have hit the five things that I see as being wrong with performance appraisals. As a hiring manager, I have never found them to be of value to either me or my direct report. Yes, they are extremely time consuming and frankly I have even seen them be counterproductive in some instances. I have found that continuous feedback and coaching throughout the year to be much more effective and timely. The only thing I can reconcile in my mind about PAs is that they make determining the percentage of pay increase a bit easier when it comes time for raises, and even at that, they don't really tell the entire "story."

  2. David M. Kasprzak

    Nail on the head, Jason.

    For me, it's a simple matter of waste and value. Resources are poured into something that has been demonstrated, for decades, to be ineffective. That alone should be reason to kill the practice.

    Regular, routine, repeated interaction and coaching works better. We know it works better. Scholtes' The Leader's Handbook explained it perfectly IMHO, and that book is creeping up on being 20 years old.

    What really needs to change is not the terminiation of Performance Reviews, but the attitudes that cause people to perceive them as necessary. Meaning – people will need to spend more time coaching and engaging. Heck, if that were a normal part of the routine, filling out those review forms would be simple. It's the "re-thinking-of-everything-that-was-done-over-the-last-12-months-and-having-no-useful-advice-or-ability-to-give-direction" that causes most managers and employees discomfort.

    All the review process does is attempt to docuemnt what should have been done all along out of habit. Since it's so rarely done, the annual process becomes burdensome and awkward. Changing the form or the methodology of the review process itself won't yield the desired behavior.

  3. Anonymous

    OK, sure, everybody (in HR) know this, yet there seems to be no general tendency to stop performance appraisals (quite the contrary). What is a reasonable, pragmatic alternative that is in line with how big companies work and reason? And that reconciles the tension between HR and Line (that is probably the reason why a performance appraisal policy exists in the first place)?

Jason Lauritsen