‘Performance Appraisal’ chisels 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 several years, I would like to challenge its usefulness in spurring innovations. I believe it 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 as per his vision. Every hit on the chisel removes some unwanted material. The artist 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 Performance Appraisal chisel – that every manager uses for a few hours (or even minutes) and removes (sometimes not explicitly though) some undesirable behavior in the appraisees. Just Like sculptor who doesn’t get a reaction from the stone or a wood that is chiseled, most managers usually don’t get a reaction or resistance from the recipient of Performance Appraisal!

Performance Appraisals don’t add anything, they only remove (chisel)

It takes several years for a wood or a stone to get formed, which the sculptor uses as a base piece for his sculpture. Likewise, when an adolescent completes the education and starts working, he/she is nothing but a base piece (blank) on which managers apply the chisel of Performance Appraisal year after year to carve out a perfect manager. The adolescent (base piece) gets created over 25 years with the contribution of parents, friends, teachers, relatives and society (figure below)!

A good Performance Appraisal points out areas where the employee must add capability and skills, but it is left to the employee who needs to work for the next year to add those skills and capabilities.

In today’s world the 3D printing can create a piece like a sculpture (eg statue) by adding layer by layer but the output won’t be called a sculpture. We are yet to find an equivalent process in Human Resources to create an ideal manager – We are progressing rapidly on making intelligent robots (Artificial Intelligence and Deep Learning) but it is also mostly for improving productivity, reducing defects, lowering costs and improving predictability but and not for improving innovativeness.

Performance Appraisals don’t carve out innovators

Performance Appraisal process usually has two parts

  1. Review of achievements against the predefined measurable annual goals

I had stated in one of my earlier blogs that innovation has hardly any defined role in achieving the annual goals and targets. The only exception, to some extent, is R&D which may have a few goals that are directly or indirectly related to innovation. The goals for most managers are aligned towards quarterly and annual performance (Revenue, Production, sales, cost, operation).  During the performance review on such goals, what do you think is likely to happen – Will the chisel result in getting rid of the rough edges that will make employee more predictable in achieving the annual targets or will the chisel result in making the employee more innovative (and hence risk-taking and unpredictable)?

If an employee who is a maverick (one who is more innovative or imaginative or creative and wants to do different things or things differently. Maverick and Sherpas are the central piece of my book and some references to it are made in one of my earlier blogs) rises in the organization, he/she gets chiseled every year until there is hardly any signs of the maverick attitude left. By this time, the employee would have risen to a position from where he could have driven bigger innovations (read: Innovations are top down and which innovations should leaders drive) but Performance appraisal would have carved him into a Sherpa. If everyone is transformed into a well-chiseled Sherpa, how will innovations happen?

  1. Review of the behavior against a set of traits defined either by the organization or by the manager

I have studied several Performance Appraisal forms and have found that the behavioral traits used 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). ‘Creativity’, a direct trait for innovation, didn’t have an objective method to measure the presence or absence of it.

Established companies are threatened from the startups where the ratio of Mavericks to Sherpas is far more (in fact most founders are mavericks who were tough enough not to get chiseled in their earlier job – refer a post on related subject). 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, variable pay or bonus, job rotation, training and for retrenchment.

In other words, performance appraisal is a review of (judgment about) 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 current and future goals and objectives of the organization. Most Performance Appraisals also identify the strengths and weaknesses of every employee for the current and future role and provide them a direction on how to fix the weaker areas that will be help both – the employee and the organization.

The review is done against 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/value in the organization, Performance Appraisal is best-accepted process to judge the relative worth and ability of employees in performing their tasks. It also 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 stopped the formal Performance Appraisal, but the decisions continued to be made that affected employees. As a result, many employees disliked not knowing the basis on which decisions were made, what the employees needed to do to improve and where they stood in management’s eyes. In addition, when companies later decided they needed to “right size” or “re-engineer” their organization, they lacked supporting documentation. Ever since then, the Performance Appraisal system has become a necessary part of the organizational processes.

If you have an example of a trait in your Performance Appraisal that is measurable and drives innovativeness, please do write to me.