Getting Rid of Performance Appraisals

Two men holding up signs with the number 10 on them.Every company has them. At Geonetric, we call them “huddles” – a chance to sit down, one-on-one with your manager to discuss your performance, your role, your goals, and areas for improvement. They usually happen every few months, or in some cases, annually. Overall, they foster great conversations, and often bring about resolutions to problems that have festered for a while. They’re the perfect time for managers to deliver a “thank you” for a job well done.

And that’s why we’re getting rid of them.

With about five years of consistent data from huddles across the company, I can say pretty confidently that they don’t directly improve organizational performance. In fact, I would argue that performance appraisals are detrimental to a high performance culture. They’re a crutch for managers, and an enabler of poor communication.

Let me tell you why.

  • Conversations that need to happen should happen immediately. Quarterly or bi-annual huddles become an excuse to delay difficult conversations until the problem is no longer relevant.
  • Feedback should be given verbally, in a real, honest-to-goodness conversation. Written communication is useful, but often is written down only after multiple occurrences. Verbal, immediate communication is more likely to actually change behaviors – which is the whole point of the feedback.
  • Management feedback isn’t all that valuable anyway. Managers aren’t domain experts in most cases. Instead, we want to emphasize peer feedback – directly and frequently.
  • Positive feedback should also be immediate. Why thank someone for a job well done today… three to six months later?
  • Fostering peer feedback is part of a healthy culture. A culture which puts the responsibility for difficult conversations primarily on managers is dysfunctional. Adult professionals can – and should – be able to approach each other regularly with candid, constructive criticism and praise, instead of asking managers to deal with every problem.
  • Goal setting should be a regular part of the work process. Performance appraisals are an HR process appended to the side of work people are already doing, to give the illusion of “control.” We found that our huddle “goal setting” was really an attempt to reverse-engineer what people did on a daily basis in an attempt to document how it fits into bigger picture goals. In other words, paperwork for the sake of paperwork. If someone isn’t doing “the right thing” then the work process itself is the problem.

And so, we’re trialing the idea that huddles are unnecessary with our software engineering team through the end of the year, to see what happens. Luckily, our software engineering team has been steeped for five years in the idea that they should be self-organizing using Agile development methods, so this change is a bit less radical to them. But it’s still an experiment that conflicts dramatically with typical command-and-control models that are so prevalent in corporate America today.

I’ll report back around the end of the year to tell you how it’s going – and if we expand this concept across the whole company. My guess: we’ll have better performance and a healthier culture without the regular performance appraisals. And we’ll ditch huddles permanently for everyone in 2013.

Have you found success at your company with performance appraisals? Or do you find them ineffective? I’d love to hear your comments about what’s working out there, and what isn’t.

And if the idea of working for a company with a culture that encourages candid, constructive criticism and praise between peers and co-workers sounds like the type of place for you, make sure to take a look at the open positions Geonetric has available.

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This entry was posted in Agile, Geonetric Culture, Leadership, Transparency by Eric Engelmann. Bookmark the permalink.
Eric Engelmann

About Eric Engelmann

Eric gets people excited. About healthcare. About technology. About Geonetric. It only takes a few moments of being in his presence to feel his passion and see his vision. A healthcare reform junkie, Eric can usually be found uncovering new ways to show healthcare executives how to leverage technology investments and develop patient portals that will improve care delivery. After earning his bachelor’s degree in business administration from the University of Iowa, he began his career in technology, founding Geonetric and never looking back. Through his leadership, Geonetric continuously receives honors and recognitions, including being named a Best Place to Work by Modern Healthcare, Software Company of the Year by the Technology Association of Iowa, and an Inc. 5000 Fastest Growing Company for five years running. When he’s not sharing his vision for the future of healthcare or accepting awards on behalf of his company, he can be found having lunch with his daughter at a local elementary school or donning lederhosen and entertaining his team at the Annual Engelmann Oktoberfest.

3 thoughts on “Getting Rid of Performance Appraisals

  1. Excellent idea! I heartily agree. Artificially grading employees creates a teacher-student/authoritarian culture and robs the employee of their dignity and professionalism. Without specific, measurable, attainable, relevant goals, there really is no way a subjective evaluation can be quantified either, especially if a company includes an expectation that employees will consistently exceed expectations. There is no logic in that. I can’t wait to hear your results.

  2. Trialing? Verbing!
    Cool ideas for streamlining evaluation and goal-setting! Maybe you should talk with academia sometime . . .

  3. @Val: good thoughts – will definitely report back what’s working and what’s not.

    @Jane: Picking on my grammar – well deserved! 🙂 I think there are lots of industries that easily fall into the embrace of paternalistic management styles, and could benefit from a more open and collaborative model. Have been discussing with my wife (teacher-in-training) how some of these could be used in public school settings … exciting potential!

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