Posted by Lancing Farrell                                                                                              530 words

Choices are necessary regarding the role of performance appraisal and how it will be done. I don’t think anyone thinks that performance should not be measured. It is a matter of how you do it.

Peter R. Scholtes points out the fundamental choice facing every organisation very clearly in The Leaders Handbook. What is most important to your organisation – controlling the behaviour of people to the satisfaction of management, or understanding, controlling and improving processes to benefit customers? Here are a few other questions that need to be answered:

• Is the success of your organisation going to come from high levels of individual discretionary effort or collaborative teamwork using organisational systems or processes?
• Are required performance standards linked to organisational goals or are they being thought up so that the performance plan can be completed and signed off on time?
• Do you have effective ways to measure performance that will provide objective data to support the performance appraisal of individuals?

The following brief questionnaire is based on a table in ‘Total Quality or Performance Appraisal: Choose One’ by Peter R. Scholtes.

Is your management effort directed towards:	y/n		y/n
Giving direction to the work force.		Directing individuals.
Controlling processes.		Controlling people.
Employees receiving judgment on systems/processes.		Employees receiving judgment on themselves.
Providing feedback based on the needs of customers and the key process indicators.		Providing feedback based on personal characteristics not relevant to the work.
Providing feedback from parts of the system that receive one’s work (customers).		Providing feed-down from the next layer up in the hierarchy.
Providing feedback useful for improvement.		Feedback being used for ratings, rewards, and sanctions.
Supporting workers’ inherent motivation.		Motivating or de-motivating workers.

There is no scoresheet. Whether you have answered yes or no, the answers are to help you decide on what is important to your organisation. There are similarities between this table and John Seddon’s comparison of ‘system’ thinking with ‘command and control’ thinking. Relating performance to purpose and value; providing feedback on contribution to systems or processes; empowering people to make decisions and improve work; and supporting inherent motivation are features of organisations using systems thinking. They are also features of more humanistic workplace culture.

Scholtes makes a simple and effective case against performance appraisal. He says that performance appraisal:

1. Disregards and, in fact, undermines, teamwork.
2. Disregards the existence of a system. It encourages individuals to circumvent the system for personal gain rather than improve it for collective gain.
3. Disregards variability in the system and, indeed, increases variability in the system.
4. Uses a measurement system that is unreliable and inconsistent.
5. Encourages an approach to problem-solving that is superficial and blame-oriented.
6. Tends to establish an aggregate of safe goals — a ceiling of mediocrity — in an organization.
7. Creates losers, cynics, and wasted human resources.
8. Seeks to provide a means to administer multiple managerial functions (pay, promotion, feedback communications, direction-setting, etc) and is inadequate in accomplishing any one of them.

It is hard to disagree.

I think that the fundamental problem in responding to evidence that performance appraisal isn’t being used, doesn’t work, and can work against a humanistic culture is the absence of an alternative. More on what can be done instead in the next post.

Scholtes, Peter R. Total Quality or Performance Appraisal: Choose One. http://pscholtes.com/articles/total-quality-or-performance-appraisal-choose-one.htm.

Scholtes, Peter R. 1998. The Leaders Handbook – a guide to inspiring your people and managing the daily workflow.