5 Signs Your Performance Appraisals Are Working

Some of you may have recently come across the news that IBM unveiled a new approach to performance reviews. I’m guessing because of my strong opinions on annual performance reviews, and my cry for companies to throw them away altogether, Workforce magazine, a sister publication of Talent Management, asked me what I thought. My comments in the article actually prompted someone from IBM to reach out to me and invite me to learn more about what they have done and how they approached it — a first, I think, in all of my days in media and publishing.

I have to say, I appreciated being invited to learn more about what an organization, especially of this size and historical prominence, did to attempt something new. Although the conversation didn’t change my mind, I do commend the team that came together to tackle this. In fact, the great lengths they took to capture the employees’ perspective on what needed to change and why impressed me. The execution of the new design is also notable, as it rolled out to all 380,000 employees in 170 countries simultaneously. Can you imagine the sleepless nights before this went live?

In the end, while I still believe that organizations should manage performance by other means, I have accepted these systems are likely to continue. So, for those of you who can’t let them go, I offer this.

If your organization just can’t ditch performance appraisals, then look for these five signs that they are doing something to help your employees:

1. Higher engagement. Most engagement surveys indicate that less than one-third of employees are actively engaged in the organization’s business. If you can observe your employees helping others, taking on additional assignments, offering unsolicited ideas for cost savings or other improvements, then these are indications that there is stronger engagement.
2. Performance/productivity increases. The numbers just don’t lie. If you have more people engaged, you will have higher productivity numbers. The more discretionary performance you earn from your employees, the better your bottom line.
3. Managers spend more time helping rather than fighting fires. This is a big one for me. I believe that a manager’s job is to do one thing: make employees successful. When that is done, managers are proactive rather than having to react to a problem.
4. Goals are clearly defined, and they’re achievable. Goals are no longer stated in terms that aren’t actionable. Instead, employees set many small goals that lead to success. When goals are met, they should be celebrated, as the more reinforcement for desired behavior, the more likely that behavior is likely to repeat. One method of this practice comes from Will Potter, former president of Preston Trucking, who would ask his employees to repeat the mission of the company and what they did that day to help achieve it.
5. Employees know how they are doing. If the appraisal is more than a ritual, employees should know every day how they are doing and why they are doing it. An appraisal should be a coaching tool. If it doesn’t lead to frequent evaluation, it doesn’t serve its purpose well. Evaluation should be daily, to start out. When the coach and employee are always in sync, frequency can be much less.

These are a few indicators of whether performance appraisals are productive. Although many major companies are making changes to their systems, I cannot stress enough that whatever they implement must address the central issue at work today: How am I doing today, and who will help me do better tomorrow?

Thanks to Aubrey C. Daniels.