Fixing Performance Evaluations Part I: The Problem

One of the most important jobs you have as a manager is to evaluate your employees' performance. Ideally, you are providing regular feedback, and so the evaluation process is merely an affirmation of a status you both already recognize.

But, to be sure, it's not easy to deliver an evaluation to an employee whose performance is less than optimal. And, generally, as that employee's compensation – or even continued employment – rests in part on your assessment of his or her performance, you may be even more reluctant to provide negative feedback. And, of course, to give a negative review, there's all that paperwork that's likely to result: improvement plans, additional meetings to review progress, and so forth. Call this the problem of manager self-preservation: no manager really wants to make his or her own life more miserable by assigning negative ratings.

Companies recognize this dilemma, and most enterprises respond as they usually do: by overcompensating and making the problem worse. More than one company I know of publishes “guidelines” for their managers regarding the distribution of ratings to be assigned to employees. HR and senior leadership will deny it all day long, but their message is pretty plain: grade on the curve.

The curve itself is a familiar one. Companies seem to anticipate through their published guidelines that their own employees perform only slightly better than the normal distribution. Thus, one guideline suggests that on a scale of 1-5 (5 being best), 15% of employees should receive a 1 or a 2, 35% of employees a 4 or a 5, and the remainder (50%) a 3.

Think about that. On a team of 30 people, four or five would receive an unsatisfactory rating, each and every time reviews are performed!

Such guidelines are laughably flawed. They provide vastly insufficient support for the idea that we:

1. Hire for excellence
2. Coach poor performers (who actually improve as a result)
3. Rid ourselves of perennial poor performers (who didn't improve).

If I do award 15% of my employees an unsatisfactory rating this year, I certainly hope I've done enough work as a leader by the following year that that number will have been substantially reduced. But corporate policy has no room for such a concept.

Well, then: perhaps the answer is to keep raising the bar. Challenge my employees to do more and more each year, until some inevitably fall by the wayside.

While there may be reasons for a version of that approach on a sales team, in most other fields of endeavor, it just doesn't make sense. If I lead a team of programmers, and they are divining clever, efficient solutions to problems and producing solid code, then what exactly would be my plan for “raising the bar” the following year? Less bugs? More lines of code? I don't think so – diminishing returns will rapidly set in. At some point, they will be working at the highest level one can reasonably expect. Am I still to assign 15% of them a failing grade?

So, put simply, the problem is this: how do I ensure that ratings are assigned fairly, while avoiding the problem of manager self-preservation?

Tune in for Part II. :)

What I Learned About Unemployment From Somebody I Once Laid Off

One cannot predict the future for certain, but I can, with little fear of contradiction, forecast that I will no longer be working at my current employer beyond May 31, 2008.

The way it has all come down is thus: many in the back office will lose their jobs as of January 31. Some are being “asked” to work right up until the end, while others are permitted to work from home, or simply stop working altogether. Those departing on 1/31 will leave with a token severance and a don't-let-the-door-hit-you sincere thank-you from their employer.

The branch and sales staff, by and large, will continue as employees.

The remaining group are being asked to stay through a transition period. Fortunately, this group includes me and the substantial majority of my team. In consideration for signing a one-sided, waive-everything-and-ask-no-questions release form, we will be eligible for a bit of an incentive package if we can stick it out until the end.

Termination dates vary for the members of this group; as I mentioned, mine is 5/31.

If an employee were to ask me what they should do with a planned Memorial Day job transition, I'd tell them, finances permitting, to take the summer off and spend it with their kids.

And that is what I hope to do. There are still six months between now and my pending independence, but if things all go as planned, I will take a month or two to spend with my kids. A real summer! Who can even remember what such a thing is like!? With my kids getting older, I know it's unlikely I'll get another opportunity like this.

A while back, when I was running my own small business, I was forced to lay off a good employee and good friend. Jim decided to take advantage of the unplanned career recess to follow a dream, and hike the Appalachian Trail from bottom to top. And that's what he did.

Jim died recently of an illness that robbed him of his ability to stand, much less hike, for years before his death. Damn, he was happy he took that opportunity when he had it. If I really manage to take a chunk of the summer off, it will be in part due to the example that Jim set for me.