Do Performance Evaluations Improve Performance?

Performance appraisals are good. Right?

Of course, periodically giving people feedback on their performance is a good thing. Isn’t it? I guess that depends on what you mean by a “good thing.” Doing performance appraisals seems like a good thing to do intuitively, but have you ever given any thought to what they actually accomplish? No … I mean “really” give it some thought. They give managers something to do at least once per year. They give human resources departments something to mandate and track each year. And, they give the recipients something to get nervous about at least once per year.

But … what do they really accomplish in the long run? Aside from having something on which to base a pay increase (that most organizations actually rarely do … everyone gets the budgeted 4% or whatever the amount regardless of the “performance rating”), what does a performance evaluation really accomplish?

I've used many, many types and forms over the years. When I was serving as a full-time Executive Pastor, one year we decided to skip it, believe it or not! Yes, we didn't do performance evaluations. Why not? We talked about it and agreed that the effort wasn’t worth it. Everyone got the raise they usually get, and we saved ourselves a bunch of work by skipping it this year. And, do you know what … all went well.

Performance appraisals … let me count the ways! I’ve done the standard fill out the form and give a numerical rating. I’ve done the fill out the form with no numerical rating. I’ve done the established objectives at the beginning of the year and rate performance to those objectives at the end of the year. Everyone seems to be seeking the 360-degree review these days, and yes, I’ve been there and done that as well. In fact, I’ve done this in many different ways. Most recently, we used an online “anonymous” 360-degree performance appraisal tool. It was pretty slick, I must say.

Before I get off the laundry list of methods and on to my point, let me share the one method I’ve used that is probably the best. When I was working for Micro Motion (way back when!) I was involved in developing a 360-degree review that would be more effective at actually helping an individual be more successful. The idea was to “customize” the process to work for the unique (and successful) culture at Micro Motion. We hired a consulting company (I don’t recall the name) to interview several people in the company. They interviewed the “movers and shakers” (people who had been very successful at Micro Motion and who had quickly moved up the ladder) and the “deadwood” (people who hadn’t really succeeded at anything). The result was a set of 12 “core competencies” around which an anonymous 360-degree evaluation was developed. As I recall, it was a pretty good tool. But, it was still just another performance evaluation.

So here’s the point. I've found that performance appraisals are not terribly useful no matter the type, format, approach, etc. Everyone does a bunch of work to "fill out the form" or "complete the 360 evaluation," but nothing ever really changes. People never really "fundamentally" change when it comes to their habits, tendencies, etc. If they are successful at changing, it happens very slowly over an extended period of time. All of the world's performance evaluations won’t make a difference in terms of the “speed of change.” They’re useful in helping an individual understand more about how others view them, but it’s been my experience that most people have a pretty good idea about how others feel about them on the job. They also have a pretty good idea about their strengths and weaknesses. Right?

So, what is "terribly useful" when it comes to improving performance? A subject for another post. I'll give you a hint, though. Read this POST.