Performance Evaluation

If there is a task that almost all managers loathe, it is giving performance evaluations. In many of my client companies, HR staff complain that managers are routinely 3-9 months late. Staff often complain that it has been years since their last evaluation. But even with our widespread dislike for the process, most companies feel compelled to require performance evaluation meetings periodically.

One reason performance reviews are such murky territory is because of the myriad of assumptions people make:

• If my performance is rated anything less than the highest level, then I am inadequate as a person.
• I should always get a rating equal to or greater than my last evaluation.
• If I have put out significant effort, I should be graded on my intent rather than my achievement.
• If I have worked hard, I should be rewarded, even if the company lost money overall.

Managers are no less vulnerable to their own confounding internal dialogue:

• If I have anything other than very positive feedback, it will hurt my staff's feelings and probably damage our relationship.
• We have to have a normal distribution of scores, so some people have to receive lower scores, no matter what their individual performance record.

The burden of these assumptions is substantial. They form the backdrop for policy, structured performance management processes, managerial behavior, and staff expectations.

Like any designed work process, performance evaluations can be constructed to support a specific goal. But what is the purpose of the performance evaluation system?

• Distributing a bonus fund according to relative contribution?
• Motivating future performance?
• Transmitting the goals of the organization into individual work plans?
• Protecting the company from unlawful termination liabilities?
• Enhancing the supervisor-staff relationship?

Answering “All of the above” only overburdens the process and precludes any clean design. And yet most companies bring such a myriad of goals to their performance management system that their process design never settles. Many companies revise their performance evaluation procedures almost yearly. Without a clearly defined outcome, the process is vulnerable to all manner of personal and political distortions.

Performance feedback systems often tug at profound dilemmas. The most basic is the tension between encouragement vs. correction. On one hand, as a supervisor I want to reward and encourage performance and effort. On the other hand, I also want to provide corrective feedback that is evaluative and possibly threatening.

Another dilemma is individual performance vs. team performance. Performance evaluations (along with their link to limijted rewards and scarce promotional opportunities) put employees into competition with each other. Any hope for greater collaboration or shared accountability is easily compromised.