As a human resource practitioner, I have found that the traditional performance appraisal system is a tool that flawed with errors. Every now and then, I will make an effort to review this tool.
Theories of management evolve over time. I personally found that some commonplace assumptions made about people performance management are wrong.
The Times Have Changed
In today’s business environment, managers are finding it necessary to adopt a participative approach to engage employees and encourage commitment to organizational goals.
To be an effective manager, he or she gradually realize that it is necessary to wear the hat of a leader, a manager and a facilitator.
As a manager, one will need to facilitate (support) your team to enable it to function productively and effectively so as to ensure the organization’s continued viability and growth in a changing environment.
For that reason, the critic approach in performance appraisal is becoming impractical.
Here is how the business environment has changed:
- Globalization (companies operating in countries outside its home country).
- Internet, tele-communication (speed of exchanging information and doing business).
- Air travel (salesmen jet-hop to do their sales).
- Change in migration patterns.
- Rise of X, Y and Z generations
- Change from agro economy to a manufacturing economy, then to a knowledge economy, followed by creative economy.
Nature of Businesses
Let us start with our fundamental assumption on the purpose of a business. Businesses are necessarily societal enterprises. An organization is a collection of people working together to accomplish pre-determined results. The organization needs to orientate itself to contribute to the market that it operates in because that helps it understand its customers’ needs better and revitalize the market that feeds it.
The globalization of businesses is no longer part of colonization nor imperialism intent. It has moved beyond the likes of the Dutch East India Company and the British East India Company.
Hire People for Their Strengths and to Achieve Results
Companies hire based on role and job descriptions, hoping to find the perfect fit.
They fail to account for the fact that people are unique. This not only includes the person’s innate talents, strengths, weaknesses, personality, family background but also work experiences. There are no well-rounded people.
It will be a mistake to rigidly hold on to a role and a job description. In reality, job are created, evolved and sometimes made redundant. Hence, it is more practical to interview potential employees first for their competencies to perform the role and at the same assess the possibility of utilizing their innate talents and strengths to take advantage of opportunities that may arise from the role. From both the candidate and the team’s perspectives, there may be a necessity to adjust the role and responsibilities.
Rewrite the Role and Job Description as You Gets to Know Someone
George Curos in his blog (http://georgecouros.ca/blog/archives/tag/peter-drucker) wrote about fitting jobs to people, not the other way around.
“We are often looking for the best person to fit a position, yet what we should be looking for is the best person. That is simple. When you see one position in a district or school create amazing results, what you often see is that exact same position replicated over and over again in other organizations yet there is often a lack of results. Why is this? Well because the position does not create results, it is the culture and the person. Simply having an “Chief Innovation Officer” does not create innovative learning environments.
The most effective approach is often finding the best person and perhaps giving them a position with duties that are ‘to be determined’. This gives that person some leeway into what they are trying to do to make a better environment and helps to build upon their strengths, as opposed to something different. It is hard to say to someone, ‘go be innovative, but within these parameters.’ We have to find out where people excel and build upon that.”
In the article “Soft Skills, Hard Questions” posted on The Drucker Institute’s website (http://thedx.druckerinstitute.com/2013/11/soft-skills-hard-questions/) on 11 Nov 2013 it narrated that Peter Drucker when counseling an executive on how to deal with a particularly difficult employee named Green. “You shouldn’t be blind to Green’s inability to get along with people,” Drucker advised. “But you have him on the payroll because he has brains, not because he is supposed to act as a social director. Concentrate on strengths. When you hire for strengths that complement and reinforce each other, then weaknesses don’t mean so much.” Drucker continued: “If you’re looking for someone to fit a job, it may take you forever, depending on how detailed the description is. To me, the effective executive starts with what a person can do, rather than what a job requires. . . . Don’t think of yourself as ‘having a job to fill.’ You need some more strength in the organization. Look for strength . . . and when you find strength, bring it in, even if you have to change the job requirements.”
How Managers Can Find Out Their Subordinate’s Strengths
A manager can only get to know the strengths and weaknesses of his or her subordinates by getting to know them. That is best done through resumes of past experiences, regular dialogues, especially by listening and asking questions on the part of the managers, and through the subordinate’s performance for assignment and learning journal.
Use Technical Competencies for Job Interviews
The first place to manage performance is to hire the right person. In simplicity, if you hired a lazy person, nothing gets done.
In practice it takes 6 months to know anyone, so for interview, it is better to use a technical competency check list for self-evaluation by the job candidate. The purpose is to ensure that the candidate have the required competencies to do the job.
The sad truth is most organizations do not have a full set of role and job descriptions, and few ever use a technical competency check-list.
The interview is the wrong time to assess a candidate on generic competencies, for example interpersonal skills, although it is useful to gather facts such as the team size, nature of business that the candidate had worked in; and well as general impression of the candidate as a person – It is simply too pre mature.
Misfits and Changing Behaviors
There will always be incompetents, unreliable or lazy employees, people with personality disorders, selfish individuals and so on.
“The task of an executive is not to change human beings. Rather … the task is to multiply performance capacity of the whole by putting to use whatever strength, whatever health, whatever aspiration there is in individuals.” Peter Drucker.
Motivating Employees – Fair Compensation
Human rights have become increasingly important. The master and servant relationship that are still prevalent in employment laws is out of date. Even though that people are an element of business costs, businesses should treat people as people and not a commodity or a number on a profit and loss statement:
People should be paid fairly for their hours, efforts and contributions. Pay should be based on value, not tradition, prejudices, rank (manager versus contributor) and unscrupulous cost saving methods. Fair compensation contributes to building lives and families.
People should be respected and considerations should be given to livelihood of employees that serve the organization. In big cities, where the corporate offices of big companies operate, lease is a significant business cost. Land costs which cause living costs to spiral upwards through lease costs can be minimized. This provides an opportunity to reduce business operating costs.
Motivating Employees – It Is What You Focus On
Jorrian Gelink in his article “Power Leadership – Motivate Their Strengths” (Posted on druckerphilosophy.com on 27 Feb 2011:
“To move their teams forward in a positive environment, all leaders in an organization need to optimize the strengths of their respective teams. Once those strengths are found for each individual; then motivation and encouragement can be used to produce stellar results.
Many managers tend to help correct their direct’s weaknesses instead of focusing on how their strengths can be properly applied to the task at hand. The direct is de-motivated because we are focused on his weaknesses which take time to improve, while the manager loses her motivation as she feels he needs to make a larger improvement in a shorter period of time. It’s similar to the case of when a tourist visits a country where they do not know the primary language, and ends up talking slower and louder in their own language and is wondering why it takes the resident so long to comprehend what they are saying.”
Promote a Learning Culture So That People Can Thrive
People are servo mechanisms. They are experiential learners, built for adaptions to their environment. It will be unrealistic to assume that well rounded individuals, who can do anything reasonably well and make little mistakes exist.
When we hire a person we should look for someone with strengths to accomplish things (achieve results) and passionate about the things he or she likes to do. The organization must be structured to allow employees to explore their ideas, manage risks and to recover and learn from mistakes.
The detection of innate talents can be followed up by involving the staff in exploratory development initiatives. For example we know that leaders are born and not made. A career framework can be designed to provide anyone that does not have the strengths be a manager to be an expert contributor. People with innate leadership qualities can be send for leadership courses to develop those qualities.
In addition, personal growth through experiential learning can be achieved by placing employees through learning as well as stretch assignments.
Comparatively competency gap or training gap resulting from a performance appraisal is often negatively received and served to strain the supervisor-subordinate relationship.
Give Employees the Opportunity to be Heard and Participate
When employees are fully engaged and contributing to the business, they would want to know or participate in the following areas:
- Decisions to be made
- Ideas to voice
- Actions to take
- Areas want to contribute or participate in
- What did the customer said
- Business costs
- Things I wish to know or be told
Train Subordinates to Work with Their Managers
A participative work environment cannot be top driven. Subordinates needs to be trained on how they can work effectively with their managers. In the January 2005 edition of Harvard Business Review, the article ” Managing Your Boss” written by John J. Gabarro and John P.Kotter, it said:
“The fact is, bosses need cooperation, reliability, and honesty from their direct reports. Managers, for their part, rely on bosses for making connections with the rest of the company, for setting priorities, and for obtaining critical resources. If the relationship between you and your boss is rocky, then it is you who must begin to manage it. When you take the time to cultivate a productive working relationship—by understanding your boss’s strengths and weaknesses, priorities, and work style—everyone wins.”
Better Still – Don’t Have Managers
Organizational hierarchies are in simplicity caste systems. They are inhibiting systems. Doing away with managers and hierarchical system does not mean doing away with leadership. It does mean stopping the practice of creating a conceptual structure and trying to slot people into the structure. The issue is that no everyone has leadership qualities and those qualities surface under different situations.
There are 2 similarities between how W.L.Gore & Associates and SEMCO SA the companies allow their workers select their leaders and teams.
In SEMCO SA, job applicants for managerial positions will be interviewed by their subordinates and every 6 months the managers will be appraised by their subordinates.
W.L.Gore & Associates does not hire or promote leaders. Instead, if associates choose to follow another associate, then that associate becomes a leader. The company calls this natural leadership.
As a point of observation, both companies were able to do away with a rigid organizational structure because they were owner initiated.
Don’t Just Focus on Solving Problems
Problem-solving is fire fighting. Peter Drucker advocates that one should invest time also in tapping business opportunities. Art Johnson in his 12 September 2012 article ” Peter Drucker’s Advice: Don’t Solve Problems – Pursue Opportunities” wrote: ” If yur focus is on solving problems, you are in fact feeding your failures, while at the same time starving your strengths. On the other hand, exploiting opportunities leverages your strengths and produces results.”
Realistically, Drucker’s point was where you focus your efforts. He didn’t recommend ignoring problems. He just suggested that you not focus on them. Problems need to be solved in order to prevent damage. However, just remember that when you patch that hole, you may have stopped a leak, but you did nothing to create growth.
If this all seems self-evident, then ask yourself, “How do I spend my day? How much time do I spend fixing, and how much time do I spend creating and building?”
If you feel like you’re spinning your wheels and think you may be caught up in a vicious cycle, you’re not alone. Problems demand your attention. Opportunities just sit out there and are perfectly happy being ignored. Is it time for a fresh perspective?”
The Strengths Theory
The strengths-based approach to people development offers an alternative to the training gap model.
Rather than identifying people’s weaknesses and helping them to overcome them, the strengths-based approach focuses instead on people’s innate talents and turning them into strengths.
The underlying reason for doing this is that when people are given the opportunity to do what they do best every day at work, their organization is more likely to have higher retention, more productivity, better customer satisfaction.
Many organizations have two flawed assumptions:
(a) Each person can learn to be competent in almost anything.
(b) Each person’s greatest room for growth is in his or her areas of greatest weakness.
The assumptions of the strengths based approach are:
(a) Each person’s talents are enduring and unique.
(b) Each person’s greatest room for growth is in the area of his/her greatest strengths.
Assumptions of Effective Managers:
(a) Some behaviours can be learned. Many proved hard to learn (Talents vs Skills & Knowledge)
(b)The best in a role create the same outcomes, using different behaviours.
(c) Weakness fixing prevents failures. Strengths building leads to success.
Build On Strengths
On 17 Mar 2013, George Ambler talks about the 5 habits of effective executives , distilled from the book “The Effective Executive” written by Peter F.Drucker http://www.georgeambler.com/5-habits-of-effective-executives/
Effective executives build on the strengths of their leaders, peers and their teams. This means that they judge people according to their strengths and what they do well. A focus on trying to get people to to many things well results in mediocrity. The goal is not to develop generalists. Rather it’s to develop and leverage the strengths within a team.
Effective executives know how to identify the strengths of people and apply them effectively within the team and organisation. This requires matching the job to the strengths of the team. Guiding team members in the use of their strengths to make the best contribution to the organisation. This requires executives to hire for great strengths and not to hire for lack of weaknesses. Hire people with the goal maximising an organisation or teams strengths.
In the article “Strengths Based Leaderhip Building the Strong Organization: Exploring the Role of Organizational Design in Strengths-Based Leadership” appearing in the Journal of Strategic Leadership, David Burkus pointed out that Rath and Conchie put forth three tenants of strengths-based leadership
- Effective leaders invest in their followers’ strengths. Where mediocre managers seek to get followers to take responsibility for their weaknesses and devote themselves to plugging these gaps, great leaders seek to manage around these weaknesses and invest their time and energy understanding and building on followers’ strengths.
- Effective leaders build well-rounded teams out of followers who are not. Leadership requires strengths in four areas: executing, influencing, relationship building, and strategic thinking. While the best leaders do not demonstrate all of these skills, they build their teams so that all four areas are represented.
- This also ties in with the concept of compatibility of team members as expounded by Firo-B instrument. Effective leaders understand the needs of followers. People follow leaders for a variety of reasons, some more common than others. Leaders build levels of trust, hope, and optimism by understanding the unique attributes of followers.
Flaws of the Traditional Performance Appraisal Management (PMP) Process
|PMP PROCESS||THE FLAWS|
|Company top management team lay out the business strategy||
|Review of Last Year Achievements –This done before setting the goals for the current year.||This may be carried out at the top management level and probably looked at at middle management level but usually there is little involvement with other staff|
|Half yearly or quarterly review – The quarterly or half yearly achievements of the annual goals are reviewed.||Usually managers and staff will find that this is a chore and will not do it.|
|Performance appraisal is conducted at the end of the PMP process.||The performance appraisal is often looked upon as a chore. As the appraisal is conducted for all staff, it is usually a rush job because there are so many to complete and so little time.It may look scientific because it involves rating scale and scoring but it is not.|
|Rewards in terms of pay raise and bonuses||The forced ranking method is subject to bias. It is an unfair compensation method because it fails to pay people fairly for their time.|
Flaws of the Performance Appraisal Form
|PERFORMANCE APPRAISAL FORM||THE FLAWS|
|The form will have the following sections:
||This form of appraisal is a judgment exercise. The appraiser is put in a position to criticize the appraisee. The process invites arguments. It strains the working relationship.Sometimes called a training gap model, in a competency based appraisal look at weaknesses in competencies such as interpersonal skills, supervisory skills.|
Making Best Use of Limited Time
What are the take-away that we can consider for re-designing how business owners can manage the talents and efforts of employees:
(a) Time is precious. Don’t spend time on doing things that have low returns.
(b) Leaders are born and not made. If you want to send people for leadership development, send people who have innate leadership skills.
(c) Don’t pay managers and expert contributors differently. A caste system alienates people.
(d) Allow people to choose their leaders and their teams. The aim is for them to be with leaders that can bring the best out of them and to serve in teams where they can contribute.
(e) Stop evaluating, assessing and criticizing. The training gap model used in traditional performance appraisal is self-defeating.
(f) Differentiate strengths and weaknesses from knowledge and skills. Use assignments and experiential learning to determine, bring out and develop innate talents.
(g) Use technical competencies for hiring purposes.
(h) Use a 6 month probationary period to get to know the person’s personality and ability to get along with other people, and work in a team. Personality tests are non-conclusive.
(i) Keep an inventory of strengths and passions.
1) Building the Strong Organization: Exploring the Role of Organizational Design in Strengths-Based Leadership Written by David Burkus Published in Journal of Strategic Leadership, Volume 3, Issue 1, 2011 page 54 to 66, Regent University ISSN 1941-4668
2) Managing Without Managers Written by Ricardo Semler Published in Harvard Business Review, September and October 1989
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