The Truth on Performance Appraisals

Dec 09, 1996

I’ve received several calls asking me if I had seen a recent article that appeared in The Wall Street Journal (November 21, 1996) on performance appraisals. Evidently, it is causing quite an uproar in the human resources community. In the article, Journal writer Timothy Shellhardt cites a survey conducted by the Society for Human Resource Management, Inc. (SHRM) (Alexandria, VA), a non-profit association made up of human resources executives. It concluded that more than 90% of appraisal systems are unsuccessful! There were also a number of interviews with managers that pointed out how ridiculous the whole performance appraisal process is in many different organizations. Of course, the article was not talking specifically about performance appraisal practices in the A/E/P and environmental consulting industry. But my experience is that we have many of the same problems that other types of firms do with the whole thing. Here is some of what I have learned about performance appraisals over the years in our industry. And as you read this, please keep in mind that at one time, I was a human resources director myself. I am also the author of the only hard-cover text ever published (to our knowledge) on human resources management for our industry (Human Resources Management: The Complete Guidebook for Design Firms, John Wiley & Sons, Inc., New York, New York 1991): Technical people hate doing them. It’s rare to find an architect, engineer, planner, or scientist who actually enjoys telling someone else what they could do better. It’s just uncomfortable. As a result, they do one of two things: 1) Avoid doing the appraisal; or 2) give a more positive review than they should. More follows. No one does these things on time. My educated guess is that in A/E/P and environmental firms, no more than 30-35% of performance appraisals are conducted on schedule. The rest are weeks or months late, or never occur at all. Most of the time, management considers this a problem and takes steps to “bug” their second-tier managers to get their appraisals done on time. But you’ll probably find that the senior managers (principals) are probably the worst offenders when it comes to doing appraisals on time. That makes it hard for them to be too tough on the managers who report to them! Reviewers are almost always more positive than they should be. In human resources lingo, this is termed the “halo effect.” It’s a rare manager who doesn’t think his or her people are better than the “norm.” And even if they don’t feel this way, it’s even rarer to find one who will be truly honest when it comes to delivering the bad news, if necessary. They’re rarely ever looked at once they’re done. Check out whether this is true— most of these completed appraisals, if they are even done, get sent straight to the HR department and are entered into the employee’s personnel file. And that’s where they stay— no one ever looks at them again! Performance appraisals are not the time to handle career development, unless you are the CEO. How can someone who may represent the obstacle to the employee help him or her get where they want to go in the company? It’s bizarre! I find that most often, the barrier to advancement is the employee’s supervisor. If the employee is a strong performer, the supervisor doesn’t want to lose them. If the employee isn’t liked by the supervisor, they won’t get moved up, either. Career development should be handled by someone other than the employee’s supervisor, unless the supervisor is CEO or managing partner. There’s no higher authority in the organization. There’s no substitute for frequently talking with your people. Personal interaction is always more effective than impersonal when it comes to communication. And you can’t wait— good news (praise) should be delivered immediately. Bad news (criticism) should be delivered immediately. It’s hard for me to understand how anyone can wait till the annual review to discuss what’s going well and what isn’t. I handle these things as they come up instead of waiting till performance appraisal time. Of course, if you are going to give out frequent and immediate feedback, this means you can’t have too many people reporting to you directly. About 8 or 10 is the most you should have. Otherwise, you won’t be able to spend the necessary time to provide quality feedback. Managers need training. Most companies tell their managers to do their appraisals, give them a bunch of forms to fill out, and then let them go. Training is completely absent! If you require your managers to do appraisals, then they need to learn to do them properly, at least for the three most frequently occurring employee types— the superstar employee (who walks on water), the average employee (who has many strengths and some weaknesses), and the problem employee (who will probably get fired soon). I like to show the right and wrong way to handle each of these three employee types. The liability of doing them may be greater than for not doing them. If you talk to an HR expert about why you have to do appraisals, one of the first things they’ll say is that doing them helps protect the firm from wrongful termination suits or from employees who charge the firm with discrimination related to a layoff or promotion decision. But with the halo effect so common, many times the positive appraisal becomes a double-edged sword, arming employees who feels they were mistreated with evidence to prove that they were as good or better than someone else who was not let go, laid off, or passed over. You can always put it in writing when you have to. There’s no rule that says you either have to give everyone bureaucratic performance appraisals or you can’t ever discipline them or warn them to shape up, or, praise them in writing. Just doing it when you need to and doing it well may, if fact, be preferable to doing a half-assed job with everyone when it comes to providing employees with feedback. I’m sure a lot of HR managers and directors will think I am diminishing the value of performance appraisals. Perhaps I am— at least the way I see firms in this business handling them. Because I see no evidence that they are accomplishing their purpose. Only a lemming will jump off a cliff because everyone else does. Perhaps that’s the case with performance appraisals in A/E/P and environmental firms. Originally published 12/09/1996

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