Performance Appraisal. Performance Review. Annual Review… There are nearly as many monikers for it as there are stars in the sky but what it really means is the annual demotivation farce which is perpetrated by employers on their employees.
What it boils down to is an asymmetric negotiation about pay and benefits in which the employer holds all the power and the employee must justify their contribution to the company in order to secure a better future for themselves. It’s archaic, unfair and frankly downright distasteful. We need modern enterprises to evolve beyond that.
These things are an anachronism of the post-war (pre-automation) industrial age where manufacturing output was directly contributed to by the individuals on the line. In a knowledge economy (which the first-world, at least, is fast becoming) we don’t have conscripts upon whom we can foist performance targets, we have volunteers who we need to engage in the continuous performance improvement of our organisations. You don’t do that by treating them like children and in fact I believe it’s counterproductive to do so.
Why don’t we take a 21st century approach:
First you need your managers to take responsibility for continuous performance management, not just on some amorphous “objective plan” once a year but continuously, based on real metrics which matter to your business: Reducing costs, increasing revenue/profits, increasing quality, increasing brand recognition etc.
Good managers will always know who their key performers are and who is not making the grade. You don’t need an overblown process to manage this, just common sense. Of course the counter-argument will be that you run the risk of cronyism, favouritism etc. but that is a straw man. Where those things are going to happen, they’ll happen. The “official” performance management systems will simply paint a veneer of objectivity over this behaviour. Without this veneer, such behaviours will quickly become apparent.
Second, you need to empower your staff to manage their performance by showing them the results of their efforts on a continous basis (business intelligence for the masses!). If you make the performance of your business, the things contributing to it and the impediments, transparent to your workforce then they will help you solve the problems, improve the performance and innovate to make improvements.
Look to your strategic business plan for your key metrics and make them everyone’s responsibility.
Third: Personal Development Plans: Poppycock. Why do we feel the need to “improve” people and push them up a hierarchy away from the job they’re good at (after all, we hired them to do it). This is a 1970’s throwback when we still treated employees as children who we were responsible for developing into nice uniform “adult” worker bees fit to the molds and pidgeon holes we have created from them.
Why don’t you just ask your people about what skills they’d really like to gain/practise/train? Ideally what they want will be something which they can directly use to improve the organisation daily but if they are not explicitly so, it doesn’t matter. If gaining a certain set of skills is something which makes them a happier human being, they will be a more productive worker.
In the 21st century we are coming to realise that diversity is a more potent force than conformity and makes our businesses more agile, effective and innovative. Help your employees to be everything they want to be (which might not be what you want them to be) and you will find their capability to surprise you with different viewpoints, innovations etc. increase. (I’d love to see a future where (for example) the BBC sends people off on Basket Weaving courses :>)
If we stopped treating humans as “resources” but as people and recognising that they will always be more than any pigeon-hole we create for them we will open up a whole new set of capabilities for our organisations. Furthermore, I believe by breaking ourselves out of the Parent-Child managerial mindset and having managers face up to the responsibility to manage the performance of their team and teammembers continuously (instead of once a year) will mean we have much productive, committed, creative, innovative and dare I say it, happier teams.
If we want to know how our employees are performing then we measure how the organisation is performing. If it’s doing well then our employees are performing well – No need to demotivate them once a year when we can motivate them every day!