Where Appraisal meets Engagement…

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It’s that time of the year again! When the industry buzzword is “Appraisal” ….. at least for a few months.

For employees – commences the race to getting to the highest bonus bracket.

For managers, supervisors – dealing with the stress of negotiations, confrontations and potentially unwarranted employee pride

For HR – is the true test of their Performance Management strategy Continue reading “Where Appraisal meets Engagement…”

Annual Performance Reviews – All Noise, No Signal

Performance_Review_Back in university when I was busy studying communication theory, the one thing we obsessed over was the SNR or Signal-to-Noise ratio.

The professor in charge of teaching us the nuances of what was quite a difficult topic, used to rate the pop-quizzes he gave us on a range of zero to one in increments of 0.1. He gave one to answers that got to the point correctly with little or no fluff (‘Maximum Signal and little noise’ as the prof said) and zero to those that beat around the bush and got no where in particular (‘All Noise, No Signal’). Most of us, unsurprisingly, clustered around 0.5.

Years later, I ran into my professor again. Now retired, he was more chatty that he ever was in the classroom and we got reminiscing about those much dreaded pop-quizzes. “I have a confession,” he said, laughing out loud, “there was far too much garbage for me to read through in those answer sheets you guys handed in. Very little Signal and lots of noise I used to actually read only a very few, and then just handed out those marks based on what I expected the student to write. And since nobody ever challenged me, and I got the bell curve of grades fitted out perfectly, it worked out just fine.” My jaw dropped! I spent years thinking I was just hopeless and didn’t really get antenna theory and radio signal propagation. I couldn’t have imagined that the forced bell-curve fitting would affect me even as a young student.

Anyway, coming back to the present day. Yet another ‘financial’ year is coming to an end, and very soon HR teams in most organizations will get busy preparing for that annual carnival called ‘Performance Reviews.’

Here’s what typically happens:

HR gives managers over a month to finish appraisals for their teams and sends multiple reminders. On paper there seems to be enough time to finish the process. With several other priorities vying for the manager’s time, appraisals gets pushed to the back of the list everyday and nobody ever gets around to spending the planned few hours with every employee.

So now, on the last day before the badly-designed, overtly-complicated HRM software with a few dozen fields to be filled, closes the appraisal process, the HR team resorts to hounding managers to finish appraisals before the deadline. ‘Do it or face the wrath of the Corporate Office’ the HR head threatens, out of desperation when he sees the dismal percentage of teams that have completed the process.

The naked threat works, with hours to go, all client work comes to grinding halt and team-members and managers reluctantly get down to the task of completing their appraisals. The manager now has to evaluate thirty odd people in a few hours, pulls out the goal sheet setup an year ago, he goes “Hmm….lets see now…” And soon its out with data and in with the subjective, the bias and the perceptions. (There’s that bell-curve to comply with.)

Understandably most employees see this as a futile exercise since its is very rare that tasks and goals laid out a year ago would be relevant now. Chances are very high that the employee actually worked on something very different at several points along the way, doused a few dozen crisis situations during the year, came up with a couple of innovative ideas that may or may not have been implemented, put in hundreds of hours of overtime to make up for inefficiencies or just plain bad planning. And in the few minutes he has with the manager while being ‘appraised’, the employee feels threatened. He has to secure his next year’s pay based on what transpires in the next few minutes.

Annual performance reviews are a mind-numbing exercise that most employees in the corporate world go through each year. And mind-numbing is apt! Research has shown that when a person is threatened, activity diminishes in certain parts of the brain. David Rock, author of “Your Brain at Work” says when that happens, “people’s fields of view actually constrict, they can take in a narrower stream of data, and there’s a restriction in creativity.”

Critical feedback doesn’t quite work the way its assumed:

Jena Mcgregor, in her recent article in The Washington Post, points to research by psychologists at Kansas State University, Eastern Kentucky University and Texas A&M University where they studied how people respond to critical feedback they receive in an appraisal of the work done in the year.

The assumption was that people who are motivated to learn things on their own would welcome the critical feedback and use it to improve their work. Apparently not!

The study was based on conclusions of a prior study which concluded that people aspire to reach their goals in one of the following three ways:

  1. They try to prove their competence at work and get positive feedback.
  2. They withdraw from tasks where they might fail and avoid negative feedback.
  3. Focus on the learning and developing of their skills.

Obviously people who fall into the first two categories, didn’t take kindly to negative feedback in their performance reviews. But to the surprise of the researchers even those with a strong learning focus didn’t quite like the negative feedback.

When one considers all the cost and effort that HR (and the entire organization) puts into the annual performance review process, it would almost seem an utter waste of all that time and money.

Here’s the wrap up of how the annual performance review process ‘performs’ :

  • Based on the research mentioned above, it seems that what is intended to be a constructive and helpful discussion quickly falls apart when the appraisees hear critical feedback. (Even for those who have a strong focus on learning)
  • In a previous article, Jena points out that Leadership advisory firm CEB’s research found that two-thirds of the employees who are rated as the firms top performers are in fact not.
  • CEB research shows that managers feel conventional reviews only generate a 3- to 5% improvement in employee performance.
  • Only 23% of the HR professionals surveyed by CEB for their research study felt that their review process was satisfactory.

All signs point to the futility of the once-a-year performance review and yet we continue to persist with the ‘established way’. Come April-May and management is shocked when the resignations come pouring in.

As I have said in a previous post on this blog, It’s time to move on!

References and Acknowledgements:

Study finds that basically every single person hates performance reviews, Jena McGregor, The Washington Post;

The corporate kabuki of performance reviews, Jena McGregor, The Washington Post

Your Brain at Work: Strategies for Overcoming Distraction, Regaining Focus, and Working Smarter All Day Long, David Rock, ISBN-13: 978-0061771293

Image courtesy of  FreeDigitalPhotos.net