Don’t Worry It’s Not You: Why Performance Appraisals Will Never Work

August 25, 2012 § Leave a comment

Most managers and employee agree that performance appraisals don’t really work very well.  They don’t fulfill their intended purposes.  Even Human Resource professionals acknowledge they fail at least ½ the time.  Considering they are the most common management tool for improving organizational performance, if I was an HR professional I might have trouble sleeping knowing they fail half the time.  But, we all know HR professionals sleep just fine because when performance appraisals fail they conveniently put the blame on a manager’s inability to carry out the process.

There are three claims HR professionals make against the manager.   The first claim usually is the managers need more training.  They claim the process is being sabotaged because the manager is incompetent and therefore the process is often completed late not done or done poorly. Secondly they blame the manager for making result of the annual appraisal a surprise instead of delivering valuable feedback consistently and frequently all during the year.  If there is a problem then managers should discuss it immediately and not wait. Finally managers are accused of being too biased in their assessment of employee performance.  The employee can detect this bias and claims a lack of fairness.

Unfortunately blaming the manager for the failure of the performance appraisal process is like blaming a driver for the poor performance of a car with two flat tires. It’s not the driver.  HR professionals are unaware of the design flaws in performance appraisals and so they find it convenient to just blame the “driver.”  The irony is the design flaws are frequently built into the process by HR.  They design the flaws into the process.  They watch the managers fail.  They blame the managers.  If it wasn’t so tragic it might make a good Seinfeld episode.

There are two important design flaws (the flat tires) in the appraisal that make it impossible to “drive” performance. First, it assumes individual performance can be measured in a complex system.  It can’t.  Second, it creates a “judge and judged” relationship.  This relationship damages trust but trust is a key ingredient for performance and quality improvement.

Individual performance in a complex system cannot be measured.  Individual performance can be expressed in the following formula:

X + XY = Individual Performance Measured

If X is the individual contribution (job performance) and Y represents the factors that impact the individual in his/her job then XY is the measure of the impact the system has on the individual.   There is a problem.   We  have two variables but only one equation.  The equation is therefore not solvable yet managers are asked to solve it in preparation for a performance appraisal meeting.  Asking managers to solve this unsolvable problem causes frustration and psychosis.  This might be one reason why managers procrastinate or do a poor job justifying the grade they assign the employee.

The manager is the judge and the employee is the judged.  As long as the manager is judging performance there can’t be optimum trust.  One of the most important needs of employees is to be treated with respect and fairness.  When they are judged it increases the probability of disappointment.  It also puts tremendous pressure on the manager to pretend to be omniscient (all knowing).  This expectation of omniscience can also create a psychotic reaction.

Blaming the manager for the results that come from design flaws is not just incorrect; it creates a psychosis which manifests waste in ways that often cannot be measured.  The next time HR tells you your employee complained about his/her performance appraisal remind them of the design flaws.  Tell them it’s not you.  I am sure they will understand.


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