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

Nobody seems to like performance appraisals—neither the managers doing the evaluating, nor the employees being evaluated. Clearly, evaluations are front-runners for being the most maligned of corporate processes. And yet they should be a good thing. After all, doesn’t everyone need—and deserve—to know where they stand? In theory, yes, but bring theory to ground and it’s quite a different story, often one with a sour aftertaste if not a bad ending.

We know there is something wrong with the performance evaluation-process, which is why we’re always trying to fix it—360-degree feedback and forced ranking are two of the more prominent recent fixes. But none of the fixes seems to satisfy everybody.

To start, I’ll fess up to an obvious fact: Most managers hate conducting performance reviews. If they thought they could get away with it, they’d probably skip the whole annoyance completely. In too many places, performance evaluations are sloppily done and not taken very seriously. A lot of supervisors would rather endure a root canal than write and deliver a performance review, particularly if there are some hard, cold truths that they can’t avoid discussing.

But in spite of all the problems and resistance, I‘m a solid believer in performance appraisal. I think performance appraisal is critically important for any organization that’s more sophisticated than a mom-and-pop store—or that wants to be.

As hard as performance appraisal may be—and done right, it is hard—I’m convinced that we do it because it’s an ethical obligation of leadership. Every person on the team wants the answers to two questions. First: What do you expect of me? Second: How am I doing at meeting your expectations? The performance-evaluation process answers those two questions. So why do we do performance appraisal? Because as leaders we have a moral obligation to do so.

And we also have an obligation to put the time into performance appraisal that it deserves. Goodness gracious! Managers don’t spend a tenth as many hours assessing and developing and appraising people as they spend in the restroom. But they’ve got the gall to whine about appraisal taking too much time. That’s nonsense.

About the Author
Dick Grote is one of America’s most successful and best-known authors, consultants, and business keynote speakers on performance management. He is the Chairman and CEO of Grote Consulting Corporation – http://www.groteconsulting.com

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tags: Performance Evaluation, Dick Grote, Performance Appraisal System, Performance Reviews

At lunch today I happened to talk with a young man who’s making a couple extra bucks working in a Halloween store. 18 years old, he told me that he had never worked before and had no knowledge of the business world other than reading Dilbert cartoons. Then he asked me to explain exactly what it was that I did as a management consultant.

“How many people are there who work in your Halloween store?” I asked him.

“About 11 or 12.”

“Who’s the best worker—the one who does the best job?”

“Stanley.”

“Who’s the worst—the one you’d fire first if you had to let somebody go?”

“Elaine.”

“How do you know? What criteria do you use to evaluate them? Would everybody agree that Stanley’s the best? Does he know that people think he’s the best? And does Elaine know that she’s the worst? And what should be done to either shape her up or ship her out? That’s what I do—I help companies set up systems to answer the questions that I just asked you.”

These are the questions—Who’s the best? Who’s the worst?—that a performance appraisal system can answer. Almost everyone in an organization wants to get ahead—even in a Halloween store. How should the company decide who the brass rings will be awarded to? Performance appraisal makes it easier for the organization to make good decisions about making sure that the most important positions are filled by the most capable individuals. (And it also makes clear who should be appropriately overlooked when promotion opportunities pop up.)

About the Author
Dick Grote is one of America’s most successful and best-known authors, consultants, and speakers on performance management. He is the Chairman and CEO of Grote Consulting Corporation – http://www.groteconsulting.com

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tags: Grote Consulting, Dick Grote, Management Consultant, employee promotion

Why do companies go to the bother of setting up a performance appraisal system? The most common reason is to give employees feedback on how they’re doing. If a company has a performance appraisal process, then the individual learns exactly how well her boss feels she did during the previous twelve months. Whether she agrees or disagrees with the evaluation (and remember—a performance appraisal is a formal record of a supervisor’s opinion of the quality of an employee’s work) she can then use that information to improve her performance in the future. And there’s something else here, too.

Performance appraisal serves another vital purpose by putting pressure on the boss to clearly communicate his performance expectations. How can you hold someone accountable for doing a good job if you haven’t told them what it is that you expect them to do and how their performance will be evaluated?

About the Author
Dick Grote is one of America’s most successful and best-known authors, consultants, and speakers on performance management. He is the Chairman and CEO of Grote Consulting Corporation – http://www.groteconsulting.com

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