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Implementing no rating performance appraisals can be a bit of a no-brainer when you consider the downsides to traditional performance appraisals. Having said that, if you want to successfully shift to a no-rating performance assessment, be prepared to do quite a bit of pre-work.
What do We Want From a Performance Appraisal?
The goal of any performance process is to inspire people to improve their own performance and consequently business results.
Specifically, you want both individuals and your organization to be more agile, anticipating changes and responding effectively and efficiently to the disruptive nature of our world.
Moreover, you want to ensure that the 4Bs of high-performance are being enhanced for each individual.
Believing: In what the organization is doing and the role he or she plays in getting the organization’s offering to the market-place
Belonging: Having a sense this community values the contributions they make and who they are as an individual
Behaving: Being clear on the behaviors that will enable them to succeed
Bottom-line: Having the tools, resources, and context to deliver the right results - fast - so the individual and the company both profit
Traditional Performance Appraisals are Fundamentally Flawed
The problem is the traditional performance appraisal generally puts the brakes on achieving those types of results. Because the traditional performance appraisal process is fundamentally flawed.
It actually sets up the conditions that create under-performance and a culture of low-performance/low morale! Certainly not something anyone would aspire to.
The psychology of managers standing in judgment of employees, rating their performance against some arbitrary scale, pointing out their flaws, goes against everything we know about high-performing individuals and organizations.
Performance Appraisals are often painful for everyone!
Humans are Hardwired to Watch Out For Threats... for Pain and Danger
Because of this hardwiring, there are two things we do, that are almost impossible to control.
Our emotions run us - and that sofware is out of date!
First, we jump to conclusions and secondly we assume the worst.
Which back in the caveman days was a good thing ... it kept us alive. Assuming that rustling in the bush is something trying to eat us, kept us alive!
And that's the problem. Our emotions run us and we are running on outdated software! You may like to think you're rational, but mostly you're not.
"Meeting Expectations" or "5/10" is a threat
And, so when your boss starts to tell you that you are "Meeting Expectations" or "5/10 on the scale" you instinctively see that as a threat. A threat to your self-worth and your standing ... because most people like to see themselves as more than average.
In fact, this is a phenomenon known as "illusory superiority".
Psychologists see this happen in their studies all the time. Ask people to rate how they drive and most people will rate themselves as above average. This study found 80% of people rated themselves above average as drivers. Calling someone average is like saying there's nothing special about you.
When people hear that, instinctively, they stop listening and start girding up to defend themselves. And depending, upon their degree of emotional intelligence things can rapidly get ugly.
Neuroscientists from the University of Chicago (Cacioppo) and Ohio State University (Ito) have been able to demonstrate that our brain is hard-wired to react more strongly to negative information.
When Emotions Kick in, More Time is Spent Defending Than Focusing on Future-Performance
Which is exactly why most managers say that performance appraisals are the task they dislike the most … why?
Because when people are judged average or lower they often become defensive and/or aggressive.
This then puts the Manager in the dangerous place of having to defend his or her judgments. Of having to defend the rating of ‘acceptable’ rather than ‘outstanding’.
Agonizing over whether someone is a ‘valued performer’ rather than ‘outstanding performer’ takes up too much time and puts the focus in the wrong place.
Most people walk out of a performance appraisal session deflated, not inspired. This has an immediate deficit impact on their performance. They are likely to spend hours grumbling and groaning to themselves, their colleagues, and their family about how nobody appreciates them and their effort.
We need to stop this circle of destruction.
There's plenty of research that confirms that performance appraisals actually cost more than any benefits.
You get lost time as people fuss and fume over their ratings.
Hours of leaders, both an individual's direct leader, their HR team and their more senior leaders reviewing the appraisal.
In fact, Adobe realised that their annual review required 80,000 hours from the company’s 2,000 managers, equivalent to 40 full-time employees per year (see this article for more).
Because ultimately what are you trying to achieve with a performance review? To stand in judgment? Or to improve performance in the future?
If it’s the latter, then the traditional appraisal process isn’t your tool!
Need to Shift From Judgement to Future-Performance Focus
What we need to do is to shift the conversation from a Manager sitting in the Judge role, affixing blame. We need leaders coaching their team members on what they can do to enhance their performance.
The key to getting people to perform closer to their potential and not be strung out by a review of their performance is to guide the feedback recipient to self-awareness and self-discovery. Helping them to review where they’ve been, but most importantly getting them focused on future performance.
When you are “future-performance focused” the conversation is what is most important – not the rating. Getting rid of the labels and rating system gets people more focused on:
Go For Feed-Forward Rather Than Feedback
Even more powerful than feedback is feed-forward.
None of us can go back in time and change the past, so feed-forward makes a whole bunch of sense. And most importantly, it takes away the barb of feedback that can get taken personally. An individual can’t take personally something that has yet to happen!
The easiest way to set up feed-forward is to do the following:
- 1Work with the team member to develop their goals for the coming 12 months
- 2Together describe the responsibilities and what success looks like
- 3Ask which behaviors, skills, capabilities will you need to develop/use less of in order to achieve that success
- 4Ask for permission to coach up if you see them not using the skills/behaviors/capabilities they are trying to instil as habits.
Point 4 is critical. Nothing is more important than the regular ongoing performance discussions/coaching sessions you have with your team members.
Regularly review how they are tracking against their goals. Keep them focused on what they’re doing well and what they need to improve. The more you can get people to self-reflect, the stronger their performance and the less you’ll need to manage.
Pay Close Attention to the Label You Give Your Program
Rather than calling it Performance Appraisal or Performance Review, give it a different name. (The way you language things is very important. Who would you rather work for a Supervisor or a Team Leader? Quite different pictures come to mind right?)
Think of the picture that comes to mind when you say performance review or performance appraisal vs performance growth.
FYI: One of my clients calls their system "My Success Program" and another "Performance Growth".
Have These Systems/Processes/Trainings in Place Before You Go to a No-Rating System
As a minimum, make sure you have these items in place before launching a no-rating performance feedback system.
- 1Have a good goal alignment process in place. There should be a clear line of sight between the organizational goals and an individual's goals.
- 2Develop a business partner mindset for both leaders and front-line team members
- 3Ensure a performance agreement system has been well established. Performance agreements should include, goals and measures around technical, social and business contribution
- 4Ensure leaders are conducting regular one-on-one sessions with each of their team members
- 5Spend time developing the emotional intelligence of everyone in the business
- 6Train your people in using the solutions-focused coaching mode
- 7Build a strengths-focused environment, and design the systems so that people have the opportunity to work on the things they do best
- 8Make use of job-profiling and personality profiling tools are used, so that people can be matched to their best possible job fit
- 9Ensure that standards of performance are clearly articulated
- 10Ensure people understand the no rating performance appraisal system and how it works
- 11Build a culture where leaders see themselves as a resource to front-line team members, helping them to barrier bust things that are getting in the way of them delivering the product or service to the customer, better, cheaper, faster
There are several important mindsets and systems that need to be in place - before you make the leap into changing your performance appraisal system. If I had to narrow it down to my top 3 - they would be ...
Develop People's Ability to Take Responsibility for Their Success
People need to feel empowered and believe that they are the one's responsible for their success. That shift in mindset is powerful. And can be achieved in less that two days!
One of the programs I've used to help organizations move toward a high-performance mindset culture isThought Patterns for High Performance. Come across and take a sneak peek at how this transformational program could work for you.
Feel free to email me if you'd like more information on the program (we have facilitators around the globe). I highly recommend that you consider this program as one of the tools to get your leaders and team members ready for high performance and no rating performance appraisals.
Inspire People to Think Like Business Owners
Teaching a business owner mindset to your team members sets them up for taking self-responsibility for their success. You can find out more about this mindset in the My Career, My Choice training. In the course, there are also self-assessments that you might like to think about for your performance review system.
Make Sure Regular One-on-Ones are a Part of Your Culture
Self-assessment and regular one-on-ones throughout the year are key to this system and must be embedded deeply in the DNA of your company. Once your team members have the mindset of high-performance employees (see the link above) - this makes this process a lot easier. Here is a a training program about holding one-on-ones.
I encourage you to ensure that this system of regular 1-on-1s is working well in your organization BEFORE you go to no ratings appraisals.
A culture of regular (weekly/fortnightly) performance discussions means the annual conversation becomes more about growth and development than looking in the rear-view mirror at past performance.
If an individual is under-performing you would have been handling that using a different process.
To Help You Set Up Your No Rating Performance Appraisal
Below are some documents you can use to help you present a new no-ratings performance appraisal system.
To Help You with the PDF
Firstly there is a document called, "My Success Performance Growth". In it, you'll see two examples of forms that each of the clients mentioned above chose to use for their programs. It is important to note that both templates are based on the Solutions Focus coaching model - which we had taught leaders some months before moving over to the new system. If you haven't used Solutions Focused Coaching before, you can find out a bit more about it here.
The templates I've shared with you are the ones we used with leaders (not front-line team members). But they should provide useful examples for front-line team members).
In the first template (page 4) you will see highlighted the words "engaging and inspiring people" you would swap those words out for each behavior/criteria you want the team member to review. My recommendation no more than 5 key behaviors/criteria.
In other words, pages 2-7 would be repeated for each of the key behaviors/criteria you want to appraise with that role and/or individual. Yes - I would recommend that you don't just use standardized forms. This is about working with an individual to improve his or her performance. Not trying to come up with a backhand system to decide pay rates!
Presentations to Key Stakeholders
The Powerpoint and Keynote are both the same document (just giving you options for your preferred software). These may be useful to help you prepare to present to key stakeholders your aims in shifting to no-rating performance appraisals.
Please note. I have purchased all the images in the presentations, however, that DOES NOT give you the right to use them. If you use them you are likely to come unstuck with copyright laws. You need to source your own images. However, I have provided links to the images I've used if you want to use the same ones.
I've included some very brief comments in the notes section of the presentation, which should help you with the context for each slide. But to add a bit more clarity here are some extra notes.
Slide 3 - is to remind participants of the goal alignment process that we had previously put in place. This provides a good linkage to where performance appraisals fit into your overall system. You can find out more about Goal Alignment here. You probably already have something similar in your organization.
On the Keynote between Slides 4 and 5 or in Powerpoint Slide 5, there is a hidden slide that helps to model out the HR functions. This is likely something you will have already covered with your leaders and team members, but I've added it in there, just in case.
Slide 6 Keynote/Slide 8 Powerpoint: shows the three elements you should have in any performance agreement with an individual.
Slide 15 Keynote/Slide 17 Powerpoint: switch out the $50/hour for whatever is the average employee hourly rate in your organization and the number of employees to make the slide work.
Between slides 29 and 30 Keynote/Slide 32 Powerpoint is another hidden slide. This is just a bit of map of the relationship between learning and the various HR elements it impacts upon. You may or may not find this useful.
If you're a Superstar member this is a good topic to talk to me about in the Ask Shelley monthly group coaching session
I wish you well, it is an exciting adventure and one that you and your leaders will love, once you get all your systems in place to support it. So much more engaging and empowering for everyone!
The following documents are available for you to download:
1. Guilt-Free No Rating Performance Appraisal (PDF, Word and pages formats). A pdf of this article
2. Performance Growth: My Success Meeting (PDF, Word and Pages formats). Two sample templates you can use to help your people reflect upon their performance and their goals for the future.
3. Introducing No Rating Performance Appraisals Presentation: A sample presentation you can use with stakeholders (up, down and sideways) to introduce no rating performance appraisals into your organization. The presentation is in both Keynote and Powerpoint.
Pay What You Want to Access these documents. Minimum is set at $1 - so if that is all you can afford, then that is all you need to pay. But, if you feel these documents will make your life easier, then please feel free to pay an amount that you feel it is worth to you and acknowledges the work I have put in to create them for you.
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