If you believe what you’ve been reading in many business publications over the last year, the individual performance appraisal tool to assess performance and deliver pay is on its way out in many large organizations. 

It turns out, the headlines don’t quite tell the whole story. 

I recently attended the Talent Management Alliance’s (TMA’s) sixth annual summit on Assessing and Developing Potential and Performance in Chicago. While there, I watched presentations by General Electric, Gap, Pfizer and Deloitte and from the titles of those talks, I assumed I would hear all about performance management’s demise in these organizations. One of the discussions was called “Blowing Up the Traditional Performance Review” and another was “Fueling Performance at Deloitte Through Reinvented Performance Management and Leader Development.” 

I’ll come back to what I heard in a minute. The whole notion of performance management systems and how to make them more effective reminded me of my “opportunity” to do so many years ago.  Performance appraisals are one those things that everyone, whether you deliver them or receive them, loves to hate. 

The system I was asked to “improve” had been a one-page, check-the-box form that measured only five-10 characteristics. It only looked  back over the past year - not also forward for the next 12 months – and included an overall rating. Everyone involved felt this form opened up the potential for reviewer bias, since that reviewer could structure responses to come up with whatever rating he or she wanted for an employee. Simply put, it was very subjective, indeed.

This new system applied to 40,000 employees - from individual contributor to senior manager - and involved several different business units. 

After much discussion with a sample group of 500, representing the larger organization we agreed to:

• A system that would evaluate and rate performance for the last 12 months using a five-point scale.
• Equal focus on the past 12 months and the coming 12 months, putting half the attention on how someone could develop moving forward.
• Introduce competencies for four levels of employees, from individual contributor through senior manager. The competencies for each level also had three to five behavioral descriptions of what someone doing this well would do.
• A 12-month pilot program of the new system with 500 people.This was very helpful, as we learned that supervisors wanted to focus on development of employees but didn’t know how to do so.
• Tools and training on how supervisors can develop employees “on the job.”
• Provide training for people receiving reviews on what their role should be. The idea was that they must be responsible for at least 50 percent of their own development.

I’m sure you want to know how it was received. Both the supervisors and those being reviewed felt it was a vast improvement. A lot of development discussions were taking place. People being reviewed were understanding what they needed to do to improve, thanks to the behavioral descriptions within the competencies.

Was it a perfect system? Nope. 

Some supervisors still did not conduct reviews, so employees who were not performing were not being told that their performance was an issue. I describe this as managerial courage. I know of no system that provides managerial courage. If there are no consequences for not doing reviews, or supervisors not dealing with sub-standard performance, then the system will be seen as flawed. 

Let’s go back to what I learned at the TMA conference in Chicago. The remakes of performance management do not focus on the negative.  The emphasis is on: “Here is what you did well, and why” and “Consider this in the future,” or “You might want to think about doing this going forward, in addition to what you are already doing.” One organization, Pfizer, spent a lot of time and energy redefining what “feedback” is - and what it isn’t. Their definition focused exclusively on positivity. 

This is a step in the right direction. While I continue to have my concerns about the non-performers, I agree the system should be built for the 99 percent of the population not the one percent. My other thought here is that performance management systems need to be changed at least every five years in order to remain fresh.

EASI•Consult® works with Fortune 500 companies, government agencies, and mid-sized corporations to provide customized Talent Management solutions. EASI•Consult’s specialties include leadership assessment, online pre-employment testing, survey research, competency modeling, leadership development, executive coaching, 360-degree feedback, online structured interviews, and EEO hiring compliance. The company is a leader in the field of providing accurate information about people through professional assessment. To learn more about EASI•Consult, visit www.easiconsult.com, email [email protected] or call (800) 922-EASI.