Will All the Perfect People Please Stand Up?
Edward Deming, one of the gurus of quality management, developed 14 points for quality.� Number 12 states, “Remove barriers that hinder the hourly worker. Supervisor responsibility must be focused on quality, not numbers. Abolish annual or merit rating and MBO completely.”� Deming goes on to say that all employees should be rated, “Must Improve” because everyone must improve for the organization to advance. This is a great point.�� Continuous improvement is necessary in all organizational cultures.� One the other hand, most people need to know what is expected and where improvements need to be made.� In 99% of the cases, people will respond and deliver on their expectations.
To those of you who did an absolutely perfect job and did not make any mistakes over the past 12 months, please let us know how you did it.� If we all take an honest look at our work performance, there are many things we could have done better.� Therefore, Deming is right about how employees should be rated.� But, heaven forbid that any of your people ever be rated “Must Improve”.� In American business today, this rating means that the employee is about to become unemployed.
Rating people higher than they should be breeds mediocrity. A few years ago, a client showed me their performance appraisals.� Literally 95% of the employees had across the board ratings of “5” on a scale of 1 to 5.� My first reaction was that they must have the best employees in the world. Alas, it was not to be.� There were way too many issues with employees. With everyone being rated that they walk on water � I wonder why. So we changed the system.� This organization is now doing the same amount of work with fewer people and quality has improved.� WOW!! Performance management works.� The challenge is changing the mindset of the organization so a rating of “must improve” is not the kiss of death. This must come from the top.
Everybody Hates Performance Reviews
A recent study from researchers at Kansas State University, Eastern Kentucky University, and Texas A&M University, highlighted these findings recently in an article in The Washington Post - https://www.washingtonpost.com/blogs/on-leadership/wp/2014/01/27/study-finds-that-basically-every-single-person-hates-performance-reviews/.� The primary reason for such hatred of the process is performance appraisals highlight the negative and are de-motivational.� No one likes negative feedback.� Managers hate them too � primarily because they don’t like giving out negative information any more than the employee likes receiving it.�
Dwelling on the negative seems to be human nature.� So � since we hate performance appraisals, we avoid them like the plague.� Then when we finally get to them, it is no more than a five minute “check off the boxes and sign here” exercise.��
So instead of eliminating performance reviews altogether, why not just change things. Even if the employee is messing up royally, there is no need to have a negative discussion.� Discussions with the “royal slacker” should be a matter of fact.� “Here are the expectations and your performance does not meet those expectations.”� It’s that simple. OK � it may not be that simple to arrive at the expectations of all employees. The great thing though is once developed � they just need to be tweaked every now and then.
Please � It is Not Just a Form to Be Completed
The performance appraisal is the most powerful and often the most misused tool for improving the performance of employees. Instead of thinking of this as an event that happens once a year, think about how you will manage performance in the long term. Goals, objectives, employment and behavioral standards must be set at the beginning of the year and monitored on an ongoing basis.� Positive and corrective feedback must be given to employees on an on-going basis.� A formal review should be conducted annually � at an absolute minimum.� Then the cycle should start over again. It is also a good idea to have informal check-ups every three to six months. If your organizational culture is one of continuous improvement, then constructive feedback is actually welcomed.�
Many organizations that want to change their performance appraisal system start with designing a new form.� This is the wrong thing to do.� If the process is not changed, the form will do nothing to improve performance. Performance improvement must be in ingrained in the organizational culture.� And please stop calling disciplinary documents a “Performance Improvement Plan.” �Change the title of the document to “Employee Counseling” or “Notification of Substandard Performance” as improving performance should be an ongoing endeavor.�
One more thing.� Just because you are not giving raises does not mean the performance reviews stop.� There are other ways to reward outstanding performance when you are unable to give raises.� Gift certificates, additional training or development, or just saying “thank you” is motivational.� In fact, when times are toughest, it becomes even more important to document performance.
Another, and maybe a better idea, is to separate performance and merit increase discussions altogether. Grant merit increases a month or so after the performance review.�
“Keep Doing What You are Doing” � A Recipe for Complacency
Never be the boss who gives a performance review without any suggestions for development or ways to become more productive.� Saying, “Keep doing what you are doing,” is wrong.� If the employees do what they always did, their performance will stay as it always has been. There will be no progression.� What we did last year is not good enough this year.� The world is changing too fast to get stuck in the same complacent rut.�
It is a very ruthless world and as we have written many times in the past, “Your only competitive advantage is your people.”� If your people are not driven to succeed, you are cutting your own throat.�
Performance Appraisals do not have to be Painful
People need goals and standards. People also need feedback. Remember that no one is perfect and mistakes will occur.� Very, very few people screw up on purpose (this is called sabotage).� For a performance management system to be effective there must be a give and take discussion between the manager and the subordinate. The discussion must be open and honest stressing the strengths of the individual as well as areas for development. If the discussion does not go well, it is an indication that there is a lack of trust between the boss and the employee.�
A Client Testimonial on Performance Management
A couple of months ago, a client called and said, “Why didn’t you tell me how beneficial the performance appraisal was?”� Well, the truth be told, we did.� It just took him a little while to get it. Hours upon hours of conversation and teaching the client how to manage performance finally sunk in.� We are pleased to hear he is using the tools we provided.� He still has some work to do, but now understands the concept.�
Things are improving in the economy.� It is time to brush the dust off of your performance management system.� Let your employees see what you see. Share your vision. Help them help you become more successful and share those successes. You will be better for it.