Posted by Lancing Farrell                                                                              650 words

This is the last post in this series. It is also where things start to get interesting. There are alternatives to performance appraisal the way we have always done it. The difficulty is that most are quite different to the current approach and pursuing them will involve the risks that always accompany change. Are we up for it?

We could just stop using performance appraisals. As Peter R. Scholtes writes in The Leaders Handbook, this would require us to start thinking differently. In essence, this would involve adopting a ‘systems thinking’ approach to managing the organisation. This is likely to require systems to support employee development and promotion, providing feedback for improvement, determining training needs, and performance managing the poor performers.

Scholtes proposes what he calls ‘debundling’ of performance appraisal to focus on each benefit that the performance appraisal system supposedly provides. He provides a list:

• Identifying and responding to outstanding performers.
• Creating a basis for pay.
• Providing feedback to individual employees.
• Giving direction and focus to the workplace.
• Identifying career goals.
• Identifying education and training needs.
• Identifying candidates for promotion.
• Identifying candidates for layoff.
• Fostering communication between employees and their supervisors.
• Creating as paper trail that will serve as a defence against suits for wrongful dismissal or other perceived unfair treatment.
• Conforming to regulatory requirements.
• Motivating employees.

I found this list interesting because I haven’t worked with a performance appraisal system that has provided all these benefits. Some of the benefits are worth more discussion for those of us working in local government.

1. Identifying and responding to outstanding performers.

Scholtes uses outstanding in the statistical sense, not the psychological sense, to describe something occurring ‘outside the current capabilities of the system’.  It is the ‘outlier’ concept popularised by Malcolm Gladwell. This involves using data to ensure performance is really outstanding (positive or negative), what are the ‘special causes’, and to determine the appropriate response.

The focus is on the data from the system, not subjective views about the individual. My experience of performance appraisal in local government has been that very little, if any, actual data is used.

2. Giving direction and focus to the workplace.

This is one area where performance appraisal is totally inadequate. In fact, the emphasis on individual performance has precluded any team or work group performance objectives or even communication about each employee’s performance evaluation. Scholtes suggests that the time spent on performance appraisal would be better spent talking about the big picture (e.g. mission, values, long-term plans and goals), annual priorities (e.g. the organisation-wide improvement plan and the department annual improvement plans), and daily work (e.g. standardising processes, finding better methods of work, and giving feedback).

3. Fostering communication between employees and their supervisors.

Scholtes doesn’t see performance appraisal as an effective way for supervisors and their employees to communicate. Instead, he suggests active listening by supervisors, well-run team meetings, and good old fashioned ‘management by wandering around’. This is common feedback to management. Staff often feel that they don’t see enough of senior managers and that senior managers know little about what they do. And they are usually right. As a manager, it is easy to be distracted by the urgent work to be done ‘scraping toast’ and lose sight of what you can do to really add value to the work of others.  And CEO’s and Group Managers always seem to have much more important things to do.

If you do decide to debundle the performance appraisal system, Scholtes has a list of important principles to keep in mind:

• Focus on improving systems, not rewarding or punishing individuals.
• Focus on customer satisfaction, not manager satisfaction.
• Don’t optimise one part of the system to the detriment of the customer, the purpose of the system, or the good of the whole system.
• Don’t make the cure worse than the disease.
• Don’t just play a different tune on the triangle; think outside the current paradigm.

It is good advice.

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