Tuesday, December 19, 2006

Performance Appraisal Time

Companies like to have things on file about employee performance and plans for development. People like to know how they are doing. You'd think that these two forces would combine to create a mighty force for good.

It hardly ever works that way.

The worst systems are the ones that force people to be put onto a bell curve. It's not that employee performance does not fall onto a curve of some sort; of course it does. But the point is that the curve is irrelevant.

The reality of human beings working is that there are three different things they can be measured against:
  1. Their own potential contribution
  2. The requirements of the job
  3. The performance of their peers
The most basic thing is how well people do against the requirements of the job. I say that it's impossible to fit these results onto a curve in a really big organization where subjectivity enters the picture. The next most important thing is how people do against their own potential -- supervisors need to find ways to unlock and unblock the energy and satisfaction trapped inside their people.

The least important thing is performance against peers. Customers don't pay more for this kind of performance, they pay for performance against their requirements. And employees don't remain loyal to companies merely so that they can score higher than their peers. So why measure it? Simple answer - it enables the salary admin people to ascribe some sort of structure to how they hand out merit increases. Not a good enough reason.

Guess what? Most people think they are a little bit above average. Not superstars, and they could do even better than their actual performance. But a little above average. Why adopt a systems that forces supervisors to tell their people that on average, they are average? While it may be statistically true, it is not organizationally useful. Frankly, it pisses people off.

Lucky you, if you work in a place where the supervisor is allowed to tell you how you are doing against the requirements of the job, and is encouraged to figure out with you what could be done so that you can use more of your natural talents.

If you work for a force-fit-to-a-curve company, too bad. If you have employment choices, think about using them. Because if their HR policies are that short sighted, chances are their marketing and operational strategies are flawed too.

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