Supervisory Leadership

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How can I improve our annual performance review?

The classic corporate tool for performance measurement is, of course, the annual or semi-annual performance appraisal. There are so many problems with this in most companies that it's hard to know where to start.

The appraisal itself often looks more like a third grade report card than something you'd want to use with responsible adults. To make matters worse, it often doesn't measure the important things.

Many companies, for example, do not measure their supervisors on the performance of the group that the supervisor is responsible for. In one retail chain I'm familiar with the salespeople are not measured on how good their sales are. Instead, they're measured on whether their boss thinks they use the approved corporate sales language.

That's just the forms. The process is just as bad.

To begin with, most companies only do formal performance appraisals once or twice a year. You could easily think that that's all that's needed.

But the best supervisors see performance appraisal as part of their everyday job. They make lots of small corrections rather than fewer, bigger ones. The system, in most places, encourages behavior that works against productivity. I tell the supervisors who make up my audiences and readers that if you or your subordinate is surprised by something at formal appraisal time, then you haven't done your job.

There are other procedural issues with many appraisal systems. Many companies "grade on a curve" with a quota (sometimes written, sometimes not) about how many top rankings you can give. The strongest form of this are the forced ranking systems that require the lower percentage people be moved up or out.

Finally, for now, there's the current hot fad in performance appraisal, the "360 degree appraisal." The idea is good: everyone evaluates and is evaluated by their boss, peers and subordinates. The problem is that 360 degree appraisal can only work if you've already established a culture of candor where people can speak the truth without fear.


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