Individual Performance. Really?

Posted: December 3, 2010 in Performance
Tags: , ,

A colleague of mine recently blogged about the importance of the performance appraisal because it was a part of performance management, which was part of talent management. Here was my reply.

“…while I agree with the case for talent management (TM) overall, my position on the performance appraisal being an integral part of TM simply because it is associated with performance management is not aligned with yours.

I agree with Dr. Deming that the appraisal is one of the seven deadly sins. Ninety-four percent of an individual’s performance is the result of the systems in which they work. Even if the objectives on the appraisal are directly aligned with those of the company, the process of evaluating performance is fraught with a myriad of psychological biases and errors. Time would be better spent evaluating and improving the systems in which people operate. Some companies say they need the document for potential legal defense, yet for every case won, three are lost because the document does exist.

The Harvard Business Review published a landmark study by GE over forty years ago. GE found that their performance appraisal system not only didn’t work, it had the opposite effect. Yet, it’s as if the study was never conducted.

Gary Hamel asserts that management practices have barely changed in a hundred years and that “management” is an area ripe for innovation.

One of the recommendations in a report I did last year was to do away with the PA. Based on my experience, I truly believe that if a CEO said we’re doing away with the performance appraisal, it would be like New Year’s Eve in Time Square.”

Check out this great clip. (Ignore the text balloon that pops up on the opening screen)

Incite: People do not work in isolation. Their motivation and ability are affected by other people, processes, and systems.  How do others respond to your efforts?  What systems facilitate or hinder your performance?

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