Suppose you had a service that, with subtle variations, was offered by nearly all of your competitors.
And suppose that despite your best efforts, only five-percent of your customers were satisfied with the results that got from using it.
Would you continue to offer it just because your competitors did?
Those statistics are not about any particular service. They were actually taken from a study done on the use and effectiveness of performance appraisals.
And if truth be told, these evaluations probably cause more angst than any other in organizations. In addition, they are ineffective and inefficient.
Angst
Let’s consider the first problem: the angst.
Although it is widely believed that people use logic to make choices, in practice their emotions influence decisions more than we’re willing to admit.
It’s true that people can give you all the logical reasons you want for making that particular choice, but the logic is used to justify a decision after it’s made; not before.
And that’s really important, because it tells us just how significant emotions are in the workplace.
The fact is that when the emotions of employees are affected negatively, performance declines.
The mere anticipation of a performance appraisal, for example, can create nervousness, anxiety and, to a certain extent, fear.
Ineffectiveness
There are numerous reasons why performance appraisals are ineffective.
Let’s just look at one of them.
In psychology, there’s a phenomenon known as the halo effect. Actors call it typecasting. It means that once we have an impression of someone about anything, it’s almost impossible for that person to be seen in any other light. In other words, it doesn’t matter what someone does, that first impression will affect your perception of him or her for the rest of your life.
What does this have to do with performance appraisals?
Simply this : The employees who get the highest ratings from the beginning tend to keep on getting them, regardless of their performance.
You may contest this, but think back over your own experiences.
What excuses are typically made for an underperforming super-star?
Difficult territory?
Family problems?
Illness?
These are real problems.
But what happens when average employees have the have experiences? Instead of a difficult territory, it can become, “he struggles no matter where you put him.”
Instead of family problems, it can become, “I don’t know why she stayed with him this long.”
And instead of illness, it can become, “She’s always sick.”
Can you see how the halo effect can influence the ratings you give your employees?
Inefficient
Let’s just consider the time that’s required to do them.
A traditional appraisal could take anything up to two hours.
Typically, the ratee just sat and listened while the supervisor tried the sandwich approach: a bit of praise, some criticism, and a few closing remarks.
The last part could be anything from hearty congratulations to threats
Some years ago multi-rater feedback was introduced.It was referred to as 360 or 540 (would you believe it?) degree feedback. This system surveyed supervisors, peers, subordinates, suppliers, and customers, and just about anyone else that they could think of.
The time allotted for each rater was about 15 minutes. And the idea was that by making a composite of opinions, a truer picture could be created of employee performance.
But no one stopped to ask how much could be learned about someone who had worked for a year by completing a questionnaire that took less than 15 minutes to fill in.
Not only that, but the aggregate time required to evaluate the results, determine the rating, and conduct the performance appraisal interview took far longer than the traditional one.
So not only did they cost more, they revealed less.
Performance appraisals cause more problems than they solve , and it’s for that reason that another method needs to be found.
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