If performance appraisal is truly important, why is it the butt of so many jokes and the target of Dilbert cartoons?

There are several reasons performance appraisal doesn't work as well as it might:

- No Ownership. Too often, neither the manager nor the individual has any sense of ownership. They weren't involved in the design or administration of the system. They frequently are not trained to use it effectively. Finally, human resources rarely asks about their reactions to and opinions of the system (and ignores any suggestions they make to improve it).

- Bad News. Managers don't like to deliver negative messages to people with whom they must work, and whom they often like on a personal basis. Employees don't like to be told that they are not quite as good as they think they are. Negative messages generate defensive reactions and promote hostility, rather than serve as useful performance feedback.

- Adverse Impact. Both managers and employees know that bad reviews adversely impact a person's career. Managers are conscious of the permanence of the paper trail that follows formal appraisal and are often hesitant to commit negative feedback to writing.

- Scarce Rewards. The organization usually offers few formal rewards for taking the process seriously and probably no informal rewards. On the other hand, there may be many informal rewards for not delivering unpopular messages.

- Personal Reflection. Managers hesitate to give unfavorable appraisals for fear that the appearance of unsatisfactory work by a subordinate will reflect badly on the manager's ability to select and develop subordinates. Lack of candor in evaluation is a way of hiding one's dirty laundry.

- EEO Terror. Managers fear that if they give an honest but unsatisfactory appraisal to a black or handicapped employee, they'll be hauled off to court for discrimination.

Although it's easy to poke fun at performance appraisal (and the way performance appraisal is carried out by many managers and many organizations makes it a worthy candidate for Dilbert lampoons), performance appraisal performs a function of enormous value to an organization and to all of its members. Performance appraisal answers the questions that everyone in an organization genuinely asks: Boss, how am I doing? Is my work satisfactory? Do I have a bright future here?

W. Edwards Deming, the quality guru, said that performance appraisals were an organizational evil that should be abolished. Was he wrong?

Yes. Deming and others in the quality movement correctly noted that individuals are rarely the responsible parties when quality problems arise. More frequently, poor quality is a function of system breakdowns and bad processes, not individual failures. Deming urged organizations to concentrate on system problems and not human problems. That approach may work well for operations management, but it leads to seriously defective people management procedures.

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Deming made a simple observation: All processes and operations are either within tolerance or they are out of tolerance in a positive or negative direction. That same principle is the one under which performance appraisal operates. An individual's performance is either that which the organization expects, or it varies in a positive way and exceeds expectations, or it varies in a negative way and fails to meet expectations. Performance appraisal is simply the application of a central idea of the quality movement to the human dimension.

But there is a flaw in applying quality principles to human performance. Quality experts operate on the basis that if operations are performing properly and according to standard, they should be left alone. Attention should be concentrated only on those aspects that vary from the norm. If this notion is applied to human performance, the great majority of workers in an organization will be ignored by the organization because their performance is not out of whack in either a positive or negative direction.

To ensure high quality of products and processes, it may be important to let alone things that are operating properly and concentrate on the exceptions. In managing human performance that approach is a serious mistake. One of the most frequent complaints people have of their organizations is that they get little attention when they do what is expected. Only when they truly excel (which, for most people, is rare) or completely screw up (which also is rare) do they get any attention from the boss.

Performance appraisal forces managers and organizations to focus on the fact that the great majority of employees are doing exactly what the organization expects of them and that the company recognizes and reinforces their contributions.

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