Effect of the Chisel called ‘Performance Appraisal’ on Innovativeness

posted by Ravi Arora May 13, 2017

April is the month for Performance appraisal in many countries including India. Having gone through the process for so many years, I would like to challenge its usefulness in promoting innovativeness and also provoke a response from the HR fraternity. Performance Appraisal, in my mind works as a chisel which shapes managers year after year; very similar to a sculptor or a carpenter who uses a chisel to give the desired shape to the object. Every hit on the Chisel removes some unwanted material. The Performance Appraisal process that lasts for a few hours (sometimes minutes) also works like a chisel and every year it removes the undesirable behavior in appraisee. The person who uses the chisel has, in his mind, the final or ideal image that he or she wants to achieve and uses the chisel accordingly. The same is true for every manager who holds the Performance Appraisal Chisel and removes (sometimes it is not explicit though) the unwanted behavior. Similar to sculptor not getting a reaction from the stone or a wood that is chiseled, the manager also doesn’t get a reaction or resistance from the recipient of Performance Appraisal!

Two questions

  1. The chisel (or for that matter any of the tool) of the carpenter or sculptor is unable to add any material – it can only remove unwanted material. Is the same true for Performance Appraisal?
  2. The unwanted behavior that Performance Appraisal removes gradually transforms the person into a better Innovator or not?
Q1. Can Performance Appraisal add something to a person or it can only Chisel?

An artist starts with a base piece  (eg Stone or wood aka blank) for his sculpture. When an adolescent completes his/her studies in college and offers himself for a job, he or she serves himself as a base piece (blank) for managers to use Performance Appraisal year after year to carve out a perfect manager. The base piece in the form of an adolescent is created over several years and the dominant people who play role in this process are Parents, friends, teachers and relatives (figure below)! We know that creation is a much slower process as compared to destruction. It takes several years for a wood to get formed which can be used for a sculpture and it takes more than 20 years for a new born baby to be ready for a profession.


A good Performance Appraisal only points out areas where the employee has to add capability and skills but it is the employee has to work hard around the year to add them in his repertoire. The 3D printing which was earlier done by parents, friends and teachers has to be done by the manager himself/herself.

In today’s world the 3D printing would enable creation of piece similar to a sculpture (eg statue) by adding layer by layer but we don’t need a sculptor for this. The output won’t be called a sculpture. We are yet to find an equivalent (3D manufacturing) process in Human resources (although we are moving fast on Intelligent Robots but that is not for innovativeness but for even more predictability!)

Q2. Does Performance Appraisal chisel the manager to be a better innovator?

Performance Appraisal process usually has two parts

  • Review of achievements against the predefined measurable goals of the year
  • Review of the behavioral traits of the employee against a set of ideal traits defined by the organisation or as perceived important by the manager.
Review of achievements against the predefined measurable goals of the year

I had stated in one of my earlier blogs that innovation has hardly any role in achieving annual goals and targets. The only exception, to some extent, is the R&D staff who may have a few goals that are directly or indirectly related to Innovation. The goals for majority of managers are aligned to achievement of quarterly and annual financial performance (Revenue, Production, sales, cost, operation).  After the performance review of managers on such goals what do you think is likely to happen – Will the chisel force/drive the employee to get rid of the rough edges that will make him/her more predictable in terms of achieving the annual targets or will it drive him to remove the rough edges that will make the person more innovative (and hence risk-taking and unpredictable)?

As an employee who is a maverick (one who is more innovative or imaginative or creative and wants to different things or things differently. Maverick and Sherpas are the central piece of my book and some references are made in one of my earlier blogs) rises in the organisation, he/she gradually gets chiseled. After a few years, there is hardly any signs of the maverick attitude left in him. This is when he/she would have risen to a position from where he/she can potentially drive bigger innovations. Performance Appraisal chisels him and he learns to act like a Sherpa. I mentioned in one of my earlier blogs that innovations are always top down. If everyone is transformed into a well-chiseled Sherpa, how will innovations happen?

Review of the behavioral traits of the employee against a set of ideal traits defined by the organisation or as perceived by the manager

I have studied quite a few Performance Appraisal forms and find that the behavioral traits used for review are mostly from the following list: Initiative, Customer Focus, Adaptability, Interpersonal relation, Communication skill, Planning, Obedience to Policies, Responsibility, Creativity, Absenteeism, Habits, Management skills (Ability to set and achieve goals and budgets). Other than the ‘Creativity’ there is no other trait that has an explicit focus on Innovation. When I probed those who use ‘Creativity’ as a trait, I found that there is no objective mechanism to measure it and it gets ignored. I also know that the overall weight given to behavioral traits is far lower than the weight given to the achievement of annual goals. If any one of you have an example of a trait in your Performance Appraisal that is measurable and drives innovativeness, please do let me know.

So let me pose the final question: Does the Chisel in the form of Performance Appraisal create more Mavericks or more Sherpas? It is clearly obvious that established companies are facing a big threat from startups where the ratio of Mavericks to Sherpas is far better (in fact the founders are mavericks who were tough enough to not get chiseled in their earlier job). I would urge the HR community to introspect and let us together find a solution to this problem.

About Performance Appraisal:

Performance Appraisal is a method by which the job performance of an employee is evaluated and documented for future use. The outcome of Performance Appraisal is used for many purposes – career development, increments/raise, Bonus, job rotation, training and also for retrenchment.

In other words, performance appraisal is a review (judgment) of an employee’s performance against pre-determined objectives and expected behavioral traits. Performance Appraisals are carried out with a hope that they would help in effectively achieving the goals and objectives of the organisation. Most Performance Appraisals also identify the strengths and weaknesses of every employee for the current and future role and gives them the direction on how to fix the weaker areas that will be help both – the employee and the organisation.

The review is done against the pre-determined (agreed) objectives/goals. Setting performance goals early in the year stimulates effort, focuses attention and increases persistence.

Since all employees wish to know their position in the organization, Performance Appraisal becomes a best-accepted process to judge the relative worth and ability of an employee in performing his task. Performance Appraisal becomes the basis for differential treatment amongst employees.

Interestingly, in the 1980s, W. Edward Deming popularized the view that little good can come from evaluating individuals’ performance. He said that the potential for de-motivating the employee was far greater than any benefit derived. Some companies actually stopped the formal Performance Appraisal. As a result, many employees disliked not knowing where they stood in management’s eyes. Decisions were being made that affected them but it was unclear on what basis the decisions were made and what the employees needed to do to improve. In addition, when companies later decided they needed to “right size” or “re-engineer” their organization and wanted to terminate employees for poor performance, they lacked supporting documentation. Ever since then, the Performance Appraisal system has become a necessary part of the organizational processes.