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Performance Appraisal vs Ongoing Performance Development

🕑 6 minutes read | Jul 27 2023 | By Richard Head, TTA Learning Consultant
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Evaluating the Past vs Investing in the Future

Performance appraisals have been around almost forever as a means of providing feedback on employee performance. Just about everyone has been involved in one and knows the drill. However, there are nasty downsides to a feedback procedure that’s often done only once or twice each year and is seen as a burden by everyone involved.

What’s In a Name?

The Promise of Ongoing Performance Development

When we hear the term “performance review,” many people have a visceral distrust of the tool otherwise known as a “performance appraisal.” Some of the reasons:

  • Performance appraisals are often about “jumping through the hoops,” but not getting at the kind of feedback that can advance employee performance.
  • Performance reviews are often thought of as something mandated by HR, not something that’s business-critical. It’s about “ticking the box” rather than contributing to company and employee growth.
  • Goal-setting is not done well. If goals aren’t properly developed between employee and employer—goals being the basis for how employees are going to be measured and evaluated—then reviewing performance with respect to those goals is not going to turn out well.
  • Many employees think of appraisals as just a “bottom line” issue: “Just tell me about my raise or bonus.”

What we just listed are criticisms of annual or bi-annual performance REVIEW. What we should look at, however, is ongoing performance DEVELOPMENT. The key distinction is that development happens regularly, isn’t a function of performance reviews, and looks ahead rather than back.

Ongoing Performance Development vs Performance Appraisals

Performance appraisals focus on past behaviors. One-time evaluations of past performance (whether that’s every six months or annually) are ineffective because they look at performance that is six to twelve months old! They’re looking in the rear-view mirror. Not only that, the performance appraisals focus on “stand-out” actions (good, bad, and indifferent) and not at those actions that necessarily demonstrate growth and development. Performance appraisals are also subject to several types of bias, including selection, anchoring, recency/frequency, and confirmation, among others. For example, anchoring and recency/frequency biases are about evaluating employees based on one or two outstanding events (good or bad) and how recent or frequent certain events were. Both biases unfairly judge employees based on terribly limited information.

Ongoing performance development is where the biggest payoff is for you, the employee, and the company because it’s not about “appraisals,” it’s not about “management,” and it’s not focused on what the employee needs to do to “improve.”

Performance development, rather than performance appraisal, is about reinforcing employees’ existing skills and developing new ones, and it’s done in real-time (“ongoing”) rather than waiting for a formal performance appraisal meeting. Think about an annual appraisal where your boss forgot about something you were especially proud of, but which happened 11 months ago and it skipped your boss’s mind—or they may not remember it at all. Ongoing performance development doesn’t let that happen because conversations between boss and employee happen frequently and are documented at that time.

If your company is firmly committed to the quarterly, bi-annual, or annual performance review process (and most companies are), a great way to ensure your employees are evaluated more objectively, with reduced bias, and a reduction in your workload, do two things:

  1. Make employees responsible for keeping detailed notes on their performance throughout the evaluation period. When employees know they, not you, are responsible for documenting their performance, they’re going to put serious effort into it and it won’t take them as much time as it would you. I once had nine direct reports and if I’d had to keep all that detail myself, I’d have been swamped and there would have been a lot that I’d forgotten or overlooked. Keep in mind, however, as the boss you’re still ultimately responsible for conducting and writing the performance review, so the onus isn’t totally on the employee. You should keep some of your own notes on their performance during the review period and then compare your notes with the employee’s version during the appraisal discussion. (But, with ongoing performance development, you and the employee will already have that documentation.)
  2. Have employees write the first draft of their own performance review and submit it to you. That’s a great way to start a conversation.

Elements of Ongoing Performance Development

Performance development has several moving parts, but they fit together nicely. One of the greatest payoffs is that this process contains everything you need to conduct a formal performance appraisal because you’ve already done most of the work!

The essential element is feedback—conversation. While the past-performance-based conversation is helpful, it’s future performance that we’re trying to emphasize. And, don’t forget that conversations with your people don’t always need to be focused on how they’re performing. Taking an interest in an employee’s long-term personal goals—including non-work interests like hobbies, vacations, reading preferences, etc.—can establish the kind of trust bond that’s absolute gold.

  • A development conversation should focus on what the employee is doing well, and how the employee’s professional development goals sync with company goals. Performance goals must be SMART: Specific, Measurable, Actionable, Results-Oriented, and Time-Specific.
  • The multiple conversations should focus on existing skills and how those are being used to meet goals, as well as discussing new skills the employee wants or needs to develop in order to continue meeting both professional and company goals. You’re expressing interest in your people and their growth (development) opportunities. This kind of conversation can be seen as an off-shoot of Appreciative Inquiry, an organization development approach that focuses only on what is working—not what isn’t working.
  • Frequency of conversations is variable but should be at least monthly. Even better is to schedule short conversations at least twice per month. There’s nothing stopping you from having a “hallway conversation” with an employee, or a quick conversation following a staff meeting.
  • Feedback can be a three-step process called the Situation—Behavior—Impact model. (If this model looks familiar, it’s the basis for behavior-based interviewing). In short: What was your challenge, what did you do, and how did it turn out?
    • Situation: Describe the issue faced
    • Behavior: Describe the actions taken to deal with the issue
    • Impact: Describe the impact of the action. Did it completely deal with the issue? Partially? Did the action fail to address the issue? What was learned? What will the employee do differently next time?
    • If the issue is something that’s just coming to light, the SBI model is:
      • What’s the issue that’s presenting itself, even vaguely?
      • What will you/we need in terms of action and resources (money, equipment, process changes, etc.) to deal with it?
      • What’s the likely outcome if we get ahead of it now?
  • Formal feedback should:
    • Be tied to the employee’s SMART goals, the organization’s mission, and the employee’s long-term professional goals
    • Be as objective as possible—don’t personalize it
    • Be as specific as possible in describing behavior
    • Be as positive as possible. If your employee must develop different aspects of their performance, say “areas for development” rather than “areas for improvement.” This last point is crucial. Most employees can take criticism if they know that, as their boss, you have confidence in their ability to rise to the challenge, acknowledge their growth prospects, and value their current and future contributions. They trust you because you trust them.
  • Development conversations should have an agenda, but also time for open-ended discussion, questions, identifying activities for the future, and what-if brainstorming.

When you focus on development rather than appraisal, your conversation changes. It goes from looking at past performance to how you and the employee can work together to develop the employee’s current and future skill sets. It looks at how those skills can advance the company’s mission and the employee’s growth prospects. It expresses your appreciation for their professionalism and how you value their contributions.

Most of us still need to conduct a formal appraisal. But, because we’ve already completed the lion’s share of the effort, the appraisal will be shorter, more positive, and much more meaningful to us, the company, and the employee. The appraisal will be a continuation of performance development and focus on the future, not the past.


Reference

https://hr.mit.edu/performance
https://www.davidcooperrider.com/ai-process/

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