Fixing Performance EvaluationsPart IIa: Some Ideas

I'll bet you figured the next post would be "Part II: The Solution". Sorry to disappoint you.

But I do have some thoughts on how to approach the problem. As you'll recall from my previous post, the basic problem with performance evaluations as they are now practiced is that managers are encouraged to ascribe ratings along the same curve year after year. Thus, managers find themselves torn between assigning correct ratings, required ratings, or easy ratings. The former are ideal, but managers will often avoid assigning appropriate ratings because there can be significant follow-up involved with employees who receive poor evaluations. Easy ratings create the least additional work for the manager, but tend to reward low achievers while disincenting stronger performers. The middle option - rating employees on the curve prescribed by senior management - is meant to force managers to assign appropriate ratings, but in practice does no such thing, for the reasons I discussed last time.

A significant drawback of the current system, really, is that we're relying on a single individual to assign these ratings. The employee's direct supervisor is responsible for the rating, and for the resulting coaching, documentation, or disciplinary action. Often, but not always, a reviewer will seek the opinions of others in the employee's sphere of activity - internal customers, teammates, and so forth - but even when a manager is diligent enough to do so, the weight and impact of that feedback can vary widely. Generally, while the manager may take such input into account, the math that combines those views with the manager's own observations to yield the final rating is mysterious at best.

But performance reviews are too important to be left to one person. And so, I give you that old chestnut, the 360-degree review. You know what this is, right? Everybody gets a vote. Of course, there's a problem here - if implemented broadly, review time will produce a transitive closure of everybody reviewing everybody else. All work will cease, the paperwork will exceed any building's capacity to house it, and that will be that.

Enter technology. It should be relatively easy to design a tool which:

1. Helps identify 3-5 candidates who can provide input for a review.
2. Limits the number of reviews any single individual can be assigned
3. Makes it easy for reviewers to supply a rating and a 3-4 sentence summary of why they would assign that rating.

If each employee were asked to review a maximum of 3-5 other employees, providing a few sentences about each one, the process would not have to be endless, nor would it have to result in enormous amounts of paperwork.

Once 360-degree feedback is obtained, the final employee rating would depend mathematically, in part, on those "outside" ratings. That makes it difficult for a manager to unilaterally enhance or diminish an employee's achievements. Managers could be allowed to disqualify one or more outside ratings, but would be required to justify each disqualification ("Ted seems to blame Alice for that project's failure, but in truth, it was unavoidable.") Furthermore, if the rating assigned by the manager were significantly different than those assigned by outside reviewers, the manager would also have to justify that.

If the manager is incented to provide accurate ratings, by presenting his or her viewpoint against the backdrop of the feedback of others, it will become a lot less attractive to merely assign everybody a "3" (or a "C" or whatever your mid-tier rating is) and move on. Another benefit is that employees will have the karmic experience of benefiting, or otherwise, from their ability to work with the others around them.

Stay tuned for an additional idea or two on improving performance evaluations.

More Staff, Fewer Managers?

When I saw the title of the Wall Street Journal article, "Overseeing More Employees With Fewer Managers," I was sure I'd hate it. To me, more employees and fewer managers means less time spent with each employee — less time to:

• Mentor
• Provide and receive feedback
• Identify strengths and find a way to leverage them
• Work with a struggling employee to return him to productivity and success

To my mind, those are key reference points in any decision concerning team size. But is there an upside to this philosophy? Are managers able to increase their "span of control" (more on that phrase in a future posting) and still end up with perfectly acceptable, people-centered results?

The article describes a Pepsi subsidiary in which "workers have been briefed on company goals and processes so that they do more themselves to keep production running smoothly." The piece goes on to explain that "[n]ew pay systems reward productivity, quality, service and teamwork while penalizing underperformance."

So, do empowered employees require less personal attention? Empowerment is certainly compatible with — even a requirement of — people-centered leadership. But does empowerment dilute the role of the leader, as the snack-food company would have us believe?

Maybe, but I'm skeptical. Deprived of individual guidance, we will expect employees to use their knowledge of "company goals and processes" to grow, thrive, and make good decisions. Well, I'm in favor of keeping your employees up to speed on those things; I'm just not sure that, in and of itself, acquainting your employees with the corporate mission statement constitutes leadership.

Of course, if the staff aren't as productive as we'd like, there's still no need to resort to manager intervention: the "pay systems" will make things right. That will sure save a lot of time on mentoring, intervention, and personal support.

In technology, we look to our teams to offer creative, practical, and innovative solutions to business problems. Leadership is critical to making that dynamic work. The WSJ article notes that Sun Microsystems - certainly a major technology innovator, notwithstanding its current precarious financial position - prefers to keep teams on the small side.

As long as we, as leaders, have something to offer our employees — as long as we can help them overcome challenges, meet their goals, and realize success in their professional lives — we owe it to them, and to the companies that employ us, to ensure that we have sufficient capacity to do so. Ultimately, employee empowerment, however laudable a goal that may be, is no substitute for the individual support and attention of an effective and dedicated leader.