So far we’ve considered a couple of key issues. First, we agree that getting accurate performance information to people is an important ethical responsibility of leadership, even though a lot of managers don’t like the process their company asks them to use. Second, we realize that there are some bumps with the way the system works. But my response to attacks on performance appraisal’s shortcomings is the same one Bill Clinton used when defending affirmative action: “Mend it, don’t end it.”

Here are some ways we can mend it. First, companies must raise their expectations about the quality of appraisal execution, setting their minimum standard for getting appraisals done at 100 percent uncomplaining compliance. If a manager’s sluggishness in completing an appraisal means that a subordinate’s merit increase is delayed, HR shouldn’t let him off the hook by automatically making the increase retroactive. I feel he should take the heat of explaining to Sally why her slothfulness in getting his appraisal written caused her to miss out on a salary increase for a pay period or two. That’ll cause appraisals to be delivered on time!

Second, top executives must threaten significant consequences if managers don’t take the process seriously. Hunt Oil’s performance-appraisal process, for example, requires every manager to discuss thirteen open-ended performance-related questions with each subordinate every March. The only writing the system requires is a memo each manager has to send to CEO Ray Hunt by March 31, saying either that he has conducted all her discussions, or that he hadn’t done so along with an explanation of the reason why. And that explanation had better be good, since on April 1 Hunt picks up the phone and starts calling. As Hunt’s VP of HR explained, “You don’t want to get that call from Ray Hunt.”

Another great way to build accountability is to insist that senior managers review and sign off on all performance appraisals before the supervisor who wrote them can sit down and discuss them with her subordinates. This review requirement not only helps assure timely completions—it boosts inter-rater reliability by making sure that people who perform at the same level of quality will get the same appraisal rating, whether the appraisal is written by manager A, manager B, or manager C.

Most important, the reviewer—the senior manager—can guarantee that tough-minded, demanding performance standards are set. Some managers (like some college professors) are more lenient than others. The reviewer can make sure that the standards of the department’s toughest appraiser set the bar for everybody else. That’s the best way to counteract the Lake Wobegon effect, in which everyone is rated as Exceeds Expectations.

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tags: Performance Evaluation, Dick Grote, Performance Reviews