Innovation and progress are very good things when it comes to how we support individual development and growth. We all want to continuously improve that which can be improved. One idea that has been gaining some popularity in recent years is the elimination of employee performance ratings/evaluations.
Advocates of the shift propose that the efforts required to get individual ratings really, really “right” across an organization aren’t worth it and that ratings can serve to unnecessarily demoralize a significant portion of the workforce. Afterall, only those rated at the top are realistically going to feel all that great about them – right?
Getting ratings 100% “right” across an organization with absolute precision and consistency year-to-year is indeed a tall order. A single performance rating perceived as unjust can become an almost permanent scar. Post-process condolences like: “Well, you mighta kinda taken in the shorts this year, but I’ll make sure it doesn’t happen again next year…” tend to fall flat.
Critics of the shift argue that we owe employees recurring and unambiguous messages about “where they stand” relative to expectations and perhaps, to some degree, their peers. High achievers in particular want to work for an organization where they believe their performance and contributions will be differentiated, recognized, and rewarded.
Further theorized is a linkage between growing up in an educational system that yields report cards with letter grades and a conditioned craving or even need for “grades” throughout our careers. Additionally, performance ratings have traditionally served as an expected factor in making and explaining compensation, promotion, and other merit-based decisions.
Some also suggest that ratings foster some degree of healthy competition that may further inspire everyone to achieve higher levels of performance. Such competition may be defined as with oneself and one’s year-to-year track record as well as with the rest of the organization.
Measurement...
Most organizations aspire to achieve and sustain peak performance. Measurement is a big part of getting there and staying there. Measurement typically leads to assessment in some way, shape, or form. You can measure performance of organizations, departments, teams, and individuals. You can assess individual contributions any number of ways – e.g. contributions to a team, a department, the organization at large, even more broadly to a community - all the way back up the chain. However, at the end of the day, what individuals do individually and collectively ultimately drives organizational performance and success.
Individual performance is often measured and assessed as some combination of the achievement of goals (sometimes expressed as "performance standards") and the demonstration of competencies as defined for a particular role. Elimination of an overall performance rating doesn't mean that discussing achievements and competency development can't still occur. In fact, I view that as the most important part of any performance management process.
One thing I have learned in my years as a leader and as a consultant is that one size truly does not fit all. Having worked with many different organizations in a variety of industries, each one is indeed unique and is “ready” for something unique to its circumstances and culture when it comes to performance management. It may be helpful to contemplate a few questions:
Why are you considering making a change?
- Because other organizations are doing it! (it’s trendy?)
- Because it’s time to “shake things up a little” around here! (change for the sake of change?)
- Because it will be easier – ratings take too much time! (how will that play with employees?)
- Because what we’re currently doing isn’t working – everyone hates it! (what specifically isn’t working?)
Before jumping to the conclusion that eliminating ratings is the best answer for your organization, you may want to explore ways to make what you’re currently doing more effective and more efficient:
- Perhaps feedback delivery is inconsistent and can be improved with some coaching-like structure and support?
- Perhaps people struggle with differentiating between performance issues (or problems) and development opportunities? All of us can benefit from identification of our development opportunities, but hopefully only a relatively small percentage of your workforce faces performance issues. In my experience, this is one of the greatest challenges organizations face from both consistency and communication perspectives.
- Perhaps your rating scales are cumbersome or signal unintended messages? Words do matter. For example, shifting from evaluative language to more developmental language may result in employees feeling more supported in focusing prospectively upon development versus idling in a mired past. Ratings can indeed be emotional. Learning from the past can be productive; debating it forever or wallowing in it isn’t.
- Perhaps well conceived technology enhancements can leverage the process of gathering and developing feedback? Striking the right balance between “less is more – keep it simple!” and robust processes of substance can be tricky. Finding that “sweet spot” somewhere in between for your organization makes all the difference.
Whatever changes you may plan to make to your performance management philosophy and approach for whatever reasons should be clearly and effectively communicated to employees in advance and with compelling rationale. If they sense the changes are being made solely to save time or to make life easier for HR or their bosses, they will interpret it as a cop-out.
What should you consider before making a change?
“It’s all about the conversation…” I couldn’t agree more – but what does that really mean and what can you do to encourage even more natural and productive dialogue supporting employee development and growth in your environment? I will say that a rating can sometimes shut a person and his/her ears down – particularly if it comes as a shock and is something lower than expected. All the great and empathetic coaching-like dialogue in the world that follows may fall on deaf ears in the moment.
Some people are naturally gifted in initiating and managing developmental dialogue. Others are not and perhaps never will be. It is very important to equip those with responsibility for delivering feedback messages with the right tools - with or without ratings. Click here for some ideas and tips about gathering, developing, and delivering effective feedback.
In my view, if the time and energy devoted to developing “perfect” ratings across an organization were actually channeled into productive dialogue and interaction in supporting employee growth and development; it’s a shift worth considering. But beware – this may be a case of throwing the baby out with the bathwater. You may be sacrificing more than just a rating. The efforts and discussions that go into developing ratings are likely generating some rich content that can, if leveraged and communicated effectively, support individual development and growth.
How will you make and defend decisions?
Absence of a performance rating per se can create something of a vacuum. Promotion and compensation decisions in particular can be left "hanging in the air" without credible support perceived as objective and linked to performance in some way. It really comes down to two things - what you communicate to your employees about their performance and what you do to support your decision-making.
Some organizations have swapped ratings out for what I’ll call behind-the-scenes “clever” questions. For example, supervisors might be asked: “If you owned your own business, would you keep this person on your payroll?” Responses to some of those questions may be interesting, but I would suggest they may lend themselves to higher degrees of subjectivity – perceived or otherwise. For example, we may be inspired to envision working with people we like – versus those who can really perform the specific competencies we need to get the job done. Plus - it can feel a little too much like “play money” in the game Monopoly to me. Beware of processes that become or are perceived as being too secretive - employees value transparency.
You can debate the merits of rating people relative to their peers and how productive that is in your environment. The reality is that when times are good - i.e. you're able to pay those you want/need to retain competitively with the marketplace and you don't face the tough decisions that come with having to reduce headcount - you may have the luxury of not really needing to differentiate performance in the traditional sense. When times are not so good, it may be another matter.
Larger organizations do face a greater challenge in determining ratings with consistency. For example, more people are involved in interpreting what a “1” versus a “2” versus a “3” may mean in their organization. But these organizations also benefit from the effort. When it comes time to consider redeployment or investment decisions, the ability to differentiate performance across a workforce in a common language with consistency is helpful.
Compliance and legal considerations:
- Some industries, particularly those subject to more regulation, may be required to demonstrate certain due diligence procedures when it comes to managing employee performance and development.
- Termination, promotion, and compensation decisions are sometimes called into question when investigating discrimination and other allegations. Objective versus subjective processes and documentation can become suddenly relevant and very important.
- Be sure to consult with legal expertise as appropriate before making changes to your processes and documentation.
Final thoughts...
Without at least some degree of due diligence and communication in assessing competencies, I think we run the risk of cheating employees. We sacrifice the ability to help them help themselves. We all tend to have something of a sense of what our own strengths and areas of opportunity to improve are, but we benefit from validation that our hunches are on track. Are we playing to strengths that are really strengths? Are we working hard to improve in areas that will really benefit from improvement in our role?
As a competency expert, I confess I am a little biased. I would suggest that clear and unambiguous feedback at the competency level still wins the race – even if it takes some time. It is an investment.
For additional information about gathering, developing, and delivering effective feedback; please click here.
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