I find it interesting that in an age where we increasingly prioritize pay transparency we are also issuing passionate calls to do away with performance reviews and ratings.
Does anyone else see the irony here?
I have encountered few organizations whose leadership has committed to a talent strategy involving identical investments in all employees regardless of how well they perform and regardless of the commitment they demonstrate to development and improvement in their roles. They want and expect differentiation. How does the organization get there without performance evaluation?
Dr. Steven Hunt, in an article a few years back titled Why High Performers Really Like Performance reviews, shares an inconvenient truth: Organizations don't get there without performance evaluation. As he says...
Companies that claim to be eliminating performance evaluations are usually just hiding the evaluation process from the employees.
From what I've observed while working with organizations who've gone "ratingless" and what I've read about those who've made news for taking the bold step of eliminating ratings, I think Dr. Hunt's assessment hits pretty close to the mark. These organization do not treat everyone the same. They do make differentiated investments across employees -- in base salary increases, in bonus awards, in development and promotional decisions, etc. These differentiated investments are based on somebody, somewhere making a summary judgment about the employee's performance and potential. It's just that those judgments happen outside the realm of a formal performance management process in a manner that is often discretionary and opaque -- and without the use of descriptive labels.
In other words and to summarize, many of us are pushing for transparency and clarity in pay decisions at the same time we are seeking to back-room the judgments used to inform those pay decisions.
How two-faced are we? Do we see the incongruity?
In an earlier article, Performance Management: We Won't Fix the Problem by Ignoring It, Dr. Hunt calls our attention to the two essential tasks that have traditionally formed the core of performance management:
- Classification — Assessing employee performance to support decisions about where to invest scarce resources such as pay, promotions, or limited development opportunities (e.g. job assignments, expensive training courses).
- Development — Assessing employee performance to provide feedback and coaching that will increase employee engagement, performance and career growth.
Classification, of course, is the more difficult of these tasks because it forces us to deal with the reality that some employees perform at a higher level than others.
It is easy to understand the temptation to yank classification out of the process and focus exclusively on the more pleasant and affirming development element. To completely avoid the stressful, difficult and potentially emotional context of a classification conversation. Except that there is a fundamental dishonesty that happens when you make and act on tough judgments without ever clearly owning them or sharing them with the affected employees.
Transparency and clarity? Not so much. Courageous and bold? Not sure I see it that way.
Bottom line, conducting performance appraisals in an honest, transparent and -- yes -- appropriately humane manner is tough and uncomfortable. Really tough and uncomfortable. But it many be those organizations and leaders who step up to the plate and do the very difficult work of getting this right who create organizations that truly thrive.
Image "Business Hide Confuse Emotion" courtesy of pakorn/FreeDigitalPhotos.net
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