John B. Bingham was left scratching his head when the topic of performance appraisals came up during a visit with a consulting client.
Bingham, a Marriott School assistant professor of organizational leadership and strategy, was told by a midlevel manager that as part of his study of the company, it would do little good to check performance appraisals, “because 95 percent of our people received the same rating: ‘meets expectations.’”
Bingham’s confusion came because the company struggled with flat sales, rising costs, and inconsistent direction.
“It was surprising that a company worried about cutting costs was being so wasteful in using an evaluation process that had no advantages to it,” Bingham says.
Performance appraisals, generally culminating in an annual performance interview, are not much more than a yearly ritual in many organizations: Employee marches into boss’ office. Boss makes small talk, peppered with glittering generalities. Boss then absently shuffles through some paperwork and mentions a numerical rating. Employee listens politely, nods, signs a form, and says thanks. They shake hands, both relieved that it’s over for another year.
If that’s a familiar scenario in your workplace, an opportunity has been squandered.
“A program of good performance appraisals can be key to the health and productivity of an organization,” says Sandy Berain, who has more than thirty years of experience as a supervisor and human relations manager in Oregon, Idaho, and Montana.
The best managers understand performance appraisals as a chance to recognize good performance, provide direction, point out areas that need improvement, and leverage the session into furthering the goals of the entire firm.
All About You
“My philosophy is that a performance appraisal’s purpose is for the individual’s development,” says Pat Bluth, a former teacher and human resources manager for Procter and Gamble and organizational development manager at IM Flash Technologies. “It should be about how to help individuals become even stronger than they are, so they can contribute to their organization’s results.”
Ideally, then, the performance appraisal is where the skills and needs of the individual employee and the goals of the company come together. Organizations that consider performance appraisals as a valuable way to improve employees and help the company move forward share many of the same characteristics. They conduct appraisals, both formally and informally, throughout the year. They’re forthright during the appraisal interview and are not afraid to point out where performance needs to improve. They link the individual’s performance with the company’s strategic plan. They have specific standards to measure performance and use the appraisal results to differentiate among employees. And they view the time as a chance to build relationships and to focus on the future.
“Organizations that don’t have a sound performance appraisal system risk complacency and give employees the sense that the organization has no interest in them,” Berain says. “It can spiral down from there.”
What’s the Use?
When done properly, performance appraisals require time, effort, and a big dose of truthfulness that can make supervisors and employees squirm. No wonder some supervisors think, “What’s the use?”
The answer to that question is, “Plenty,” says David Cherrington, a Marriott School professor of organizational leadership and strategy. The first basic purpose, he says, is compensation. Performance appraisals and pay should be linked. “We assume people want to be paid for what they do,” he says. “And people who perform better should be paid better.”
Next is the chance to provide basic feedback to employees about how well they’re doing. “A performance appraisal should consist of a supervisor letting the person know the specific areas where improvement is needed,” Cherrington says. “And every employee deserves to receive some form of appreciation and credit if they’re making a contribution.”
Third, Cherrington points out, beyond pay, personnel decisions are made on the basis of performance appraisals. Who is promoted? Who is retained? Who gets fired?
There’s another good reason to conduct formal performance appraisals: protecting the supervisor. Especially in the last twenty years, “employers have had to defend themselves, and the best way to justify why you paid someone at a certain level, or disciplined them, is a legitimate performance reason to justify your action,” he explains.
Finally, Cherrington says performance appraisals are a time to talk about other tasks. Training needs, new assignments, and even mundane chores such as updating HR information can be a part of the review. “My experience suggests that a lot of supervisors feel threatened by performance appraisals,” he says. “But if they can’t evaluate performance well, they’re not going to be good supervisors.”
Still, not every supervisor is sold on conducting performance appraisals. Berain has hunches about why they don’t always embrace the concept.
“Supervisors say, ‘I have too many things going on,’” she says. “Or they just have a general uneasiness about talking with people. Another reason is they don’t know enough about the employee’s actual performance to comment constructively.”
None of those reasons hold water, she believes. They’re all excuses, and not very good ones at that.
What You Appraise Is What You Get
Through his thirty-five years of teaching and organizational experience, Cherrington has deduced one important aspect of appraising performance. It’s a concept that could make big differences in steering an organization.
“Whatever you evaluate tends to improve,” he says.
Cherrington tells of a friend who served in the military years ago. The friend was in charge of training clerk-typists. In his performance appraisals he listed cleanliness and orderliness as a top priority.
“That got translated to how clean you keep the top of your desk,” Cherrington says. “What he then found was that every clerk-typist had nothing on their desks. The drawers were a mess but their desks were clean.”
Whether the goal is keeping the desk clean or improving corporate profit, organizations that get the most from performance appraisals all seem to agree on a few basic tenets.
One of those tenets is that performance appraisals are not just a once-a-year event. Wise supervisors never stop reviewing performance. The annual performance interview then becomes the culmination of yearlong feedback and not a blind side by the boss. More feedback is simply better for the employee and the company.
“A good performance appraisal happens all the time,” says Michael Corum, an author, trainer, and management consultant based in Shingle Springs, California. “The feedback is constant.”
Telling the Whole Truth
The appraisal experts, while they differ some in their approaches, all say that the interview portion of a performance appraisal must be truthful and straightforward. While tap dancing around a delicate topic or not providing constructive criticism might seem the gentler approach, it usually does more harm than good. Bland performance appraisals generally set the stage for bland results. Insipid appraisals rob the organization of the chance to nudge an employee in a better direction.
“Managers who want to coach, motivate, and be popular have a difficult time providing constructive criticism,” Bingham says. “That makes sitting down and telling people they’re not doing what you expect of them a very hard thing to do.”
Berain once found herself in the position of telling several employees they weren’t making the grade.
“I followed a supervisor who gave only glowing reviews,” she says. “I had to be tactfully honest with moderate performers who had come to expect an outstanding performance review.”
It took time and caused a bit of angst for her employees to adapt, but in the end, Berain has no doubt the performance of those she supervised improved.
“Supervisors who don’t take the opportunity to provide both positive and not-so-positive performance reviews aren’t doing anyone a favor,” she says. When criticism must be delivered, keep it constructive. “Be careful in your selection of words,” Berain says.
Cherrington’s advice is simple: “Be specific. Be direct.” Being less than truthful in a performance appraisal can boomerang on a supervisor as well. Corum tells the story of an acquaintance whose secretary just wasn’t cutting it.
“The secretary was a wonderfully dedicated person, but absolutely incompetent,” he says. When the supervisor found out she had applied for another job, he wrote her a glowing appraisal, hoping it would help “to get rid of her.” It worked. On her last day in the office, she came in early to clean her desk. She found a copy of the appraisal and read it.
“She was standing there with tears coming down her face when he walked in, saying, ‘I never knew you felt this way about me. I just can’t leave,’” Corum says. “So she stayed with him for another two years.”
Everyone Fits in the Big Picture
Supervisors should always tie an employee’s performance into the larger organizational picture. Employees, no matter what they do in the firm, must understand what is expected of them and how their work contributes to the organization. Otherwise, they’re left to drift without a compass in what could be uncharted corporate waters. It’s true whether you’re a top manager in a Fortune 500 company or you sweep out the basement after everyone else has gone home.
“Ultimately, the performance review should tie an employee’s skills and performance to the organization’s strategic goals,” Bingham says. “Otherwise, their job is simply instrumental to getting a paycheck.”
Making that critical tie is primarily the supervisor’s responsibility.
“It does no good to bring a person into the office and talk about performance if he or she doesn’t know what the organization’s goals are,” Bingham says.
“Meeting Expectations” May Mean Someone Isn’t
Another supervisory performance pitfall is painting virtually all employees with the same broad brush.
“The three general ratings are ‘exceptional,’ ‘meets expectations,’ and ‘does not meet expectations,’” Bingham says. “You can bet your next month’s salary that 85 to 90 percent of many company’s employees fall into that middle category.”
It’s an easy thing for supervisors to do. There’s little risk in rating almost everyone the same. No jealousies among co-workers. No pushback from employees. No huge investment in keeping track of every little thing an employee is or isn’t doing.
But in the end, it also may mean stunted progress for the organization.
“It’s important to have enough variance to create the ability to differentiate among individuals,” Bingham says. “Managers too often aren’t creative enough in their performance appraisals to allow for differentiation.”
And differentiation—the ability to discern and document differences among performances—is vital to an organization’s health. Bingham says that organizations stuck in the “meets expectations” mode risk “becoming fat with deadwood people.” When changes need to be made—reassignments, cutting jobs, or looking for the next management star—everyone instead tends to look the same. Congratulations. Mediocrity—not meritocracy—has been achieved.
A Matter of Style
It’s probably safe to say that no two supervisors approach performance appraisals and performance interviews the same way. For most it’s a matter of style and what they want to accomplish during the interview. Corum says the best supervisor he ever met began each performance interview by asking, to the astonishment of his employees, “What can I do to help you perform your job better?”
That’s in line with Bluth’s philosophy about performance appraisals, which should be “about building relationships.”
“Give them good feedback, along with things they could be doing better. Take two or three things that they do well and balance those with one or two things they need to improve on,” Bluth says.
Cherrington takes a slightly different view.
“I’m not a fan of the most popular evaluation format, often called ‘the sandwich format,’” he says. “The idea is that you have two pieces of bread with baloney between them. You say good things, butter them up in the beginning, with criticism or instruction next, then you finish with another round of praise,” he explains.
Cherrington says employees don’t listen to the initial praise because they know the criticism is coming next. They don’t hear the compliments in the end because they’re still digesting the critique.
There is a simpler and more effective approach, he says. “The first words out of your mouth should be, ‘There are two things we need to talk about: A and B.’ Then move to the positive comments and express appreciation.”
From Slouch to Superstar?
The best supervisors and organizations believe in the benefits of performance appraisals. They can help turn frogs into princes, dunces into dynamite, and slouches into superstars. Right?
Not so fast, says Michael Corum. “Don’t expect performance appraisals to take care of performance problems,” he says. “You may have to use other means—transfers, reassignments, or materially changing jobs. You’ve got to have a keen sense about what you can and cannot change in people. It doesn’t mean they’re stupid, but it usually does mean they’re in the wrong job,” he says.
And what about underachievers who have grand notions about their worth, those who believe the building’s walls and bottom line will fall if they ever walk out the door?
The best-crafted appraisal in the world isn’t going to change them, Corum says. “Don’t waste your time with people who are deluded, the people who have wildly exaggerated notions about themselves. Either change the job or get them out of it.”
To Your Advantage
Remember the company where 95 percent of the employees were rated “meets expectations”? It was going through the motions but not gaining much traction with its weak performance appraisal system. John Bingham says some progress has been made.
“I raised the issue with them. There will be an opportunity for greater development of their program,” he says. “Performance appraisals are too costly not to leverage to a firm’s advantage.”
Sandy Berain says when everything goes right with the system and employees have received an evaluation that is fair, frank, contains no surprises, and is tied into the organization’s goals, they walk away ready to take their performance to the next level. “It’s a gratifying experience for everyone,” she says. “There’s a real sense of team accomplishment when appraisals are done well.”
Failing to Meet Expectations:
What NOT to Do in a Performance Interview Here are eight common ways that supervisors fail to meet performance review expectations.
1. Fuzzy Thinking, Fuzzy Results
Maybe the most common error that managers and supervisors make is not thinking through what they really expect from an employee. Fuzzy thinking begets fuzzy results.
“Do your work up front, which means it’s not what you do at the end of the year but what you do at the beginning of the year,” advises Corum. “Set good, clear, measurable goals, and follow up on them throughout the year, so that the performance appraisal interview is something of a formality.”
2. The Numbers Game
Numbers appeal to some supervisors—they’re easy to grasp and black-and-white; but news of numerical ratings tends to spread throughout the office, and the results can lead to hurt feelings, jealousy, and instant disagreement.
“Why am I a three, when Joe is a four and I work harder than he does?” Bluth says.
Much better, she says, is a kind of qualitative review that helps employees become better at their jobs. “The supervisor needs to really have good intentions about helping the employee grow and develop.”
3. Wishy-Washy Words
Ever had a poorly conducted performance interview and walked away feeling less sure of your standing with the company than ever before? Bingham has, in one of his first jobs.
“I was never called in for a performance interview,” says Bingham of his first year on that job. “The supervisor finally said, ‘I never had time to do the formal evaluation, but I think you know you’re doing fine.’ The problem was, I didn’t know what ‘fine’ was or meant,” Bingham says. “Uncertainty and ambiguity are not good things.”
4. Lowering the Boom
Appraisals are not ambushes—or at least they shouldn’t be, according to Bluth.
“If an employee sees a list of ten or twelve things they’re supposed to improve on, it becomes hard to focus and it’s really demoralizing,” she says.
Cherrington concurs. He tells new supervisors that the first thing they ought to say is, “Here are two or three things you need to improve on.” “If you talk about more than three, you tend to muddy the water and become punitive,” he explains.
5. Singing Their Praises Out of Tune
This seems obvious, but isn’t always. If you’re conducting a performance interview with a stellar underachiever, don’t make him or her feel like a superstar.
“Straight talk” is what Bluth says works best. “Give feedback directly, don’t sugarcoat it, don’t mush it up with a lot of words.”
Cherrington says, “If you have poor or weak performers, you don’t want to lavish praise on them, because if they don’t shape up, you may have to terminate them.”
6. “Comparisons Are Odious”
John Lydegate, a fifteenth-century British poet, is generally credited with originating the phrase. He could have well been writing about performance appraisals. Saying something like “You’re not as good as Max or Sarah” or “If you could only adopt Michael’s work ethic” should never be a part of an appraisal. Nor should phrases such as “You’re the top employee here, and I wish I had a dozen more like you” ever tumble from a supervisor’s lips.
“The focus should be on the individual’s development, not on others,” Bluth says.
7. Nothing Ever Changes
Berain says it sends all sorts of dismal signals to an employee when the performance criteria remain the same year after year. “You have a draft appraisal for the year, and twelve months later you come back and see your draft as a final with nothing changed. Those are missed opportunities. They don’t speak well of the supervisor’s commitment,” she says.
8. An Issue of Trust
Bluth says that peer performance reviews are popular in some organizations. That’s when co-workers get a say in how an individual is stacking up. Some supervisors don’t filter the peer comments.
“It’s the supervisor’s responsibility to go through the input and use what fits best in the conversation. The supervisor needs to take ownership in the message,” she says.
Peer reviews are risky. More than one supervisor has seen the results of a peer review, “gasped, and said, ‘We wish we hadn’t done that,’” Bluth says.
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Article by Donald Smurthwaite
Illustrations by Greg Clarke
About the Author
A writer from Meridian, Idaho, and the father of four children, Donald Smurthwaite is the author of seven books and dozens of magazine stories. He earned his BA in communications from Brigham Young University in 1977.
