6 Steps Beyond Industrial Age Performance Appraisals

It takes courage, tenacity and teamwork to let go of performance appraisal practices and industrial age thinking.  In our  post 9-11, post financial meltdown, “New Normal,”  business will never be again as it was.  It’s tough, though, to leave our rootedness in twentieth century business practices.  For example, note this recent entry in Wikipedia:     Willy Wonka So Excited Perf Evaluation

“As of 2013 electric power generation is still based mostly on fossil fuels and much of the Third World economy is still based on manufacturing. Thus it is debatable whether we have left the Industrial Age already or are still in it and in the process of reaching the Information Age.” 

To begin the journey, watch this short video, the second in a two part series about letting go of performance appraisal.

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“If you do not know how to ask the right question, you discover nothing.”

~ W. Edwards Deming

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The video covers the William Berger concept of asking a beautiful question, similar to the words of organization systems pioneer,  W.Edwards Deming, “If you do not know how to ask the right question, you discover nothing.”

If you missed our first video, here’s a short recap:

We covered the origins of performance review from 3rd century Chinese philosopher Sin Yu through Robert Owen, who set up a system for daily worker feedback.  We included the “father of scientific management,” Frederick Taylor’s and his ONE BEST WAY of performing work , tailored to the manufacturing age. We also featured W. Edwards Deming and the Quality movement, which spawned systemic changes in business in the 1990s.  We have a ways to go to make the systemic concepts of Deming a reality in the 21st century.     

Newer concepts and systems to spur on change:  In 1998, a Fast Company magazine article titled “How to Give Good Feedback” by Gina Imperato described several efforts by companies to abolish performance reviews and replace them with something else.

One story in the article, about Parkview Medical Center, is a helpful example of how to change thinking about this long time practice. It describes how they discovered there wasn’t any way to improve doing individual performance appraisals, so they stopped doing them, replacing them instead with the APOP, a system focused on developmental conversations:

APOP sample In the late 90s, with the agreement of the CEO, they stopped doing performance reviews and replaced them with the APOP, the Annual Piece of Paper. They realized that daily feedback among leaders, their staff, and team members was the most important kind of feedback.  It could not be captured on paper. So they made the change from top-down performance appraisal reports to having annual reviews as a bottom-up conversation.  You can see a 2004 online version of an APOP tool here.    

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There are no scores, no written goals for the next year.  It’s literally a piece of paper…
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The shift away from performance reviews, described in the article, was a big change in thinking and beliefs. Instead of evaluating past work, the annual meeting became a development-oriented conversation, based on requests for development or assistance based on asking good questions:

  • What can I / we do to make your job easier?
  • What gets in the way of accomplishing the job?

Meme, dinosaur, eat before or afterGoal setting tied to evaluations:  We are used to setting goals and meeting targets.  Whether those are team or individual goals, we are still mostly tied to an individualized performance appraisal mindset that is too emotional, subjective, and rigid for the global, customer-centric, lightning fast paced world of today.

Using an approach like the APOP or a two box annual conversation method, Meets [or Exceeds], Does not Meet, as mentioned in the video, is a step in the right direction. It is a form of incremental change, very similar to the Adobe Systems “check-ins” featured here in more detail.  Adobe’s 2012 system moved away from individualized ranking and ratings.   Their change is similar to the flip in thinking that created the APOP, the Annual Piece of Paper approach.  

A transformative leap would be taking an even larger leap away from such meetings entirely.  Philosopher, professor and deeply revered executive coach Peter Koestenbaum  asks, “How can we muster the guts to burn our bridges and to create a condition of no return?”  The context for his question is in the sometimes, or even often times cruel, dehumanizing aspects of business pressures existing in a polarity of building a creative, humane workplaces.  Koestenbaum says:


“There’s a terrible defect at the core of how we think about people and organizations today. There is little or no tolerance for the kinds of character-building conversations that pave the way for meaningful change.”    

(Interview by Polly Labarre, March 2000 issue of Fast Company magazine)


Enter the place for re-emphasizing the high value of conversation and building a depth of understanding in human relationships.  The two box evaluation is a step away from inspection-oriented evaluations and step towards valuing conversation.

A Critique – The Death of Pass/Fail Minimal Appraisal:  As of 2008, an article in the Journal of Organization Development authored by Stanley Ridley, predicted the death of two box performance appraisal, also labeled the Pass/Fail approach. The article argues the point that a Pass/Fail system, which can only identify the 1% or less who fail, can be hardly fair or valid, when aligning performance with organization goals.

Here are my responses to the article’s critiques:Grandma, likes & dislikes, meme

  • 1)  Fairness is not the goal of using a pass/fail system.  It’s about making an incremental change AWAY from appraisals entirely. Fairness is a relative concept for any type of rating system based on the perception of the fairness of the rater. Pass/Fail and narrative,  performance appraisal methods are a steps toward conversational documentation tools.  They are steps on the path to letting go of individualized performance appraisal beliefs entirely in order to shift to new methods of capturing worker contribution and accomplishments.
  • 2)  Validity:  The Ridley article lists low validity for Pass/Fail performance appraisal vs. multi-level ratings in a table, as there is no differentiation in performance related to organization goals. Well, exactly.  It’s important to look for other ways of capturing data on worker performance and alignment vs. continuing with 20th century psuedo-valid rating scales based on one supervisor’s view of an individual’s performance.  

    No, we cannot make performance appraisals objective.  Ever.

    No, we cannot make performance appraisals objective. Ever.

  • 3)  Objectivity:  You won’t ever remove subjectivity from manager-employee performance discussions, no matter how much manager training you do.  The individual evaluation focus will always be based upon that manager’s perspective of the business and her relationship with her workers.  It will always have an element of “inspection” based on top-down management beliefs, based on scientific management thought leadership attributed to Frederick Taylor and Henry Ford.  That was a very long time ago.

    Are W. Edwards Deming's principles evident in this book?

    Are W. Edwards Deming’s principles evident in this book?

  • 4)  Who really gets Deming?  I was amused to find a passage in, “Performance Management: A pocket guide for employee development” by James Rollo, 2001 that cites “The Deming Perspective.” It mentions the approximately 1% figure that Stanley Ridley cites as an issue of “fairness.”  The book states:

“Deming also suggested that 99.7% of employees operate within the system. That means on average only .15% are above the system (and need special reward or advancement) and .15% are below the system (and need special coaching or job change.) It is important to recognize the effect of company systems on employee performance.”   (p. 113)

 

Rating scale by billso Flickr

Rating scale by billso Flickr

Moreover, this 2001 guide then continues merrily along on the very next pages, pp. 114-118 illustrating how to develop “A Performance Appraisal Format” complete with a 4 point individual rating scale and a 3 point group performance appraisal. It would seem Deming’s points were stuck in book to acknowledge his systemic view, then duly ignored.

Well then.  You can do better.  You can let go of performance appraisals.

Let it go, let performance appraisals go...

Let it go, let performance appraisals go…

The Way Forward:  The workers within your business are the ones who have and can continuously improve it.  They are the best resources to help you adapt to VUCA, the volatile, uncertain, complex and ambiguous 21st century business environment.  21st century thinking is:

  • Letting go of the illusion of control symbolized in rigid appraisal practices,
  • Embracing the reality of networks, in person and virtual, and
  • Reconsidering hierarchy as just one of several options for how organizations today are designed

 

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In complex environments, weak hierarchies and

strong networks are the best organizing principle.  

…It means giving up control.    

– On moving from hierarchies to teams and “Wierarchies,” by Harold Jarche

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Establishing agreement of what the work is, talking about the work regularly including two-way feedback, and asking good questions is a better option than maintaining bureaucratic performance appraisal for another decade.  Three book/white paper references at the end of this post provide more ideas and specifics on alternatives to performance appraisals.

The business luminary, the late Peter E. Drucker, offered a stunning glimpse of the future that sheds light on supporting worker productivity with new methods.  In 1959, Drucker coined the term “knowledge worker and later in his life considered knowledge worker productivity to be the next frontier of management.

Meme, Perf Appraisals, So Last Century B, SpartaAlas, even Peter Drucker succumbed to business bureaucracy.  He invented MBO’s, Management by Objective, now seen as a ponderous system of goal setting and review.  

In the 80’s, I spent hours writing my MBOs, having them reviewed, sticking them in a folder, only to be used as minor guides in performance evaluations.  MBO’s are so last century.

However, in Drucker’s classic book, “Managing for Results” (1964, 1986), he also offers what I’d dub today as 21st century beautiful questions:

How to See the Unexpected:

1)  Who is the non-customer, the [person] who does not buy our products even though he is (or might be) in the market.  And can we find out why he is a non-customer?

2)  What does the customer buy altogether?  What does he do with his money and his time?

3) What do customers — and non-customers, buy from others?  And what value do these purchases have for them?  What satisfactions do they give?  Do they…give satisfactions our products and services…could provide too, perhaps even better?

4) What product or service would fulfill the satisfaction areas of real importance–both those we now serve and those we might serve?

Taking the first step:  Both the APOP and Adobe meeting check-ins are incremental, yet sweeping changes that help to sever the industrial age “inspection of individuals” mindset.  Beautiful questions can also help us make a significant change from the traps of business inertia, updating your organization’s practices and culture toward flexible, adaptive support and development of your people.

Change concepts and models, such at the transitions model by William Bridges and the concepts of letting go by the authors of Theory U, among others can help.  Asking yourselves beautiful questions helps.  You can find more resources about change here:

And here:   Change Management Resources

Laughing team appraisal villains memeWhat about teams?   A few months ago in a program I offered to HR professionals the question came up, “How do you do team appraisals?  Well, replacing one tedious, outdated practice with the same thing applied to teams is  like replacing a Model T with a Greyhound bus to race the Daytona 500. Instead, consider pit crews, working toward an understood goal of amazingly fast changeovers.  It’s the clear understanding among team members, agility and good results using a few, smart metrics that matters.

Finally, as listed in the video, here are six questions to test your readiness to make this change happen:

Powerful Performance Questions, 6 Steps Toward Change

1)  Why are we doing things the way we’ve been doing them the past 20 years—what if we tried a whole new approach?   Thank you Warren Berger, author of “A Beautiful Question: The Power of Inquiry to Spark Breakthrough Ideas (2014)

2) What is ending?

3) What is beginning to happen?

4) How can we best respond as a whole system?

5) Who needs to do what, when, with what resources (people, data, things)  to help this happen?

And a beautiful, short question to ask at the right time:

6) What’s important?

If you take this path, let me know how it is going on the journey.

You can reach me at DebNystrom@Reveln.com    

I’m glad to help.     ~  Deb

 

REFERENCES:

You can see all the books I recommend for Performance theme on my book page here.  Adaptive, agile start-ups of this decade, who don’t have the built-in inertia of bigger companies with long histories, will be greatly served by looking at the performance  approaches suggested in these books and resources:

  • The Knowing, Doing Gap:  How Smart Companies Turn Knowledge Into Action, (2000)  by Pfeffer and Sutton, Stanford professors and consultants.
  • The BetaCodex white papers including:  “Making Performance Management Work” (2009)  by Niels Pflaeging.  The Pflaeging and company white papers are especially helpful for seeing the reasons why imposing spreadsheets on performance processes doesn’t work based on flawed beliefs.
  • A useful books that examines 40 current performance tools and practices and provides antidotes to command and control thinking is, Beyond Performance Management: Why, When, and How to Use 40 Tools and Best Practices for Superior Business Performance (2012) by Jeremy Hope and Steve Player.

Terms and REVELN Resources:

The New Normal  

The Industrial Age defined by Wikipedia

VUCA is a term developed by the military.  It is useful for defining the volatile, uncertain, complex and ambiguous nature of our 21st century world.

Here’s a curated collection on new ways to structure work, learning, leadership and management pertinent to this article:

I also curate articles on this topic via my ScoopIt Talent & Performance newsletter here.

To stay in touch and not miss the Best of the Best news, preview and sign up for my newsletter on my TOOLS page here. 

Thanks for stopping by.   As always, on-topic comments are very welcome!

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4 Responses to “6 Steps Beyond Industrial Age Performance Appraisals”

  1. Hi Deb,

    this is a good topic and a good possible starting-point to change thinking about performance, team effectiveness, and change itself. Ultimately, getting rid of performance appraisal requires re-thinking our perception of human nature, and our people practices, overall.
    So I think your campaigning against performance appraisal is very to the point.

    By the way: I do not think that getting rid of performance reviews and appraisals is so hard. What is hard is to upgrade the thinking behind those HR and performance management practices… but that is more related to the How to? question.

    Thanks for the hint on the BetaCodex Network in the video, by the way!
    A paper we wrote that relates to the topic here is: http://www.slideshare.net/npflaeging/bbtn10-making-performance-management-work-presentation

    Regards, Niels

    • Exactly, Niels, upgrading the thinking behind appraisals is IT. Yet performance review systems persist in so many businesses today, even though I’ve heard administrators say they’d like to get rid of them, for years. They’re still around, rooted in compensation partly, for reasons that are not supported by research. If an incremental change to pass/fail systems (APOP) and/or dialog / conversational systems will help smooth the way, OK. If adopting upgraded thinking is the larger change that people are ready to make, let’s GO for it! Imagine the released productivity! Your article you’ve listed supports this. Best, ~ Deb

  2. […] The old performance appraisal is a relic from the 20th century industrial age. Instead, have ongoing, informal performance conversations that are both group and one on one. Develop agendas that include the success of peers and teams as […]

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