Performance Appraisals

David Brent: Under strengths, you've just put Accounts.

Keith: Yeah.

David Brent: That's your job though...

Keith: Mmm.

David Brent: No, Keith, I was sorta looking for the skills within your job, so was there anything else you could've put there?

Keith: (Shakes head)

David Brent: Ok, um, under weaknesses, you've put eczema.

Keith: (Nods)

David Brent: Right. You've left this section completely blank Keith. You haven't done the Q & A.

Keith: I thought that you filled that out.

David Brent: No, no, no, no, this is aimed at you... To what extent do you believe that you have the skills and knowledge to perform your job effectively? And then you just tick one of the boxes: Not at all, To some extent, Very much so, Don't know. What would you tick?

Keith: Don't know ... Keith continues answering "Don't know" to every question.

David Brent: If "Don't Know" wasn't there, what would you put?

Keith: What were the options again?

David Brent: Not at all, To some extent, Very much so, ...

Keith: Very much so.

David Brent: Do you remember what the question was?

Keith: No.

-- David Brent appraises Accountant Keith (from The Office UK, Series 2, Episode 2)

Performance appraisals are an instrument for social control. They are annual discussions, avoided more often than held, in which one adult identifies for another adult three improvement areas to work on over the next twelve months. You can soften them all you want, call them development discussions, have them on a regular basis, have the subordinate identify the improvement areas instead of the boss, and discuss values. None of this changes the basic transaction... If the intent of the appraisal is learning, it is not going to happen when the context of the dialogue is evaluation and judgment.

-- Peter Block in the Foreword to "Abolishing Performance Appraisals, why they backfire and what to do instead" by Tom Coens and Mary Jenkins

Drive out fear, so that everyone may work effectively for the company. Eliminate management by numbers, numerical goals. Substitute leadership. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.

-- W. Edwards Deming

Having been on both sides of many performance appraisals (both good and bad) for over thirty years now, I feel they do more harm than good. What do you think?

Curiously, the switch to Agile development processes did not affect the (already existing) company wide annual performance appraisal process. Our HR department seemed unaware that switching to Agile processes might warrant a review of how Performance Appraisals are performed.

Agile Performance Appraisals

As Sue's team instinctively realized, ranking people for merit raises pits individual employees against each other and strongly discourages collaboration, a cornerstone of Agile practices. Sometimes ranking systems are used as a basis for dismissing the lowest performers, making the practice even more threatening. When team members are in competition with each other for their livelihood, teamwork quickly evaporates.

Tomorrow, they would have to start working together on the next release. How could something that was supposed to boost performance do such a thorough job of crushing the team's spirit?

The whole idea of ranking made no sense for a team effort, especially in an Agile environment.

-- Mary Poppendieck

In Compensation and Appraisals, Mary Poppendieck lists five reasons why individual performance appraisals are incompatible with Agile methods:

• Competition between individuals harms teamwork.
• A system that is perceived to be unfair de-motivates team members.
• Setting impossible goals (backed by financial incentives) harms motivation and makes the team cynical.
• Optimizing part of the chain sub-optimizes overall performance.
• Working for financial gain harms instrinsic motivation.

Self Appraisal

The Dunning-Kruger effect is a cognitive bias in which "people reach erroneous conclusions and make unfortunate choices but their incompetence robs them of the metacognitive ability to realize it". The unskilled therefore suffer from illusory superiority, rating their own ability as above average, much higher than it actually is, while the highly skilled underrate their abilities, suffering from illusory inferiority. This leads to the perverse situation in which less competent people rate their own ability higher than more competent people.

-- The Dunning-Kruger effect

In the late 1990s Justin Kruger and David Dunning won the Ig Nobel Prize in psychology by performing a series of studies demonstrating that the less skillful had a tendency to overrate their abilities and fail to recognize expertise in others.

This rings true with my experience. I've often been flabbergasted over the years when those I considered "top performers" were very hard on themselves during the appraisal and self-rated themselves accordingly. Conversely, I've witnessed many ordinary performers self-rate themselves ludicrously highly -- maybe they (cynically) viewed the appraisal as a game and thought that by issuing a high self-rating they'd be more likely to achieve a handsome pay rise.

What to do Instead

From the book Abolishing Performance Appraisals, why they backfire and what to do instead:

• Coach Employees.
• Provide Effective Feedback.
• Change Pay Practices.
• Change Promotion Practices.
• Use a broad-based team to design alternatives based on healthy assumptions.
• Create a work climate that trusts and respects people as responsible adults.
• Encourage everyone to take responsibility to get the coaching assistance that will best serve their individual needs and the particular situation.
• Foster a work culture where feedback is integrated into the day-to-day work.
• Adopt profit or gain-sharing practices that equitably benefit everyone when the overall organization is successful.
• Conduct just-in-time reference checks and use state-of-the-art interview techniques to fairly and accurately assess each candidate's potential for the position sought.
• Encourage and train people to be responsible for their own development and professional growth.
• Educate all supervisors on the origins of poor performance, the importance of good fit, and ways to work with people in need of special help.
• Establish formal counseling and corrective action systems for poor performance.

Slogans

The team assigns itself the task of setting and upholding a standard of prideful workmanship ... now imagine dropping a $150 framed poster to advise people that "Quality is Job One". Oh, Gee, we never would have thought that. No sir, we sort of assumed -- until this wonderful poster came along -- that Quality was Job Twenty-Nine ... But now we know. Thanks.

These motivational accessories are a triumph of form over substance. They seem to extol the importance of Quality, Leadership, Creativity, Teamwork, Loyalty, and a host of other organizational virtues. But they do so in such simplistic terms as to send an entirely different message: Management here believes that these virtues can be improved with posters rather than by hard work and managerial talent.

That important matters like these should be the subject of motivational posters is already an insult. But the implementation makes it even worse ... Motivational accessories are phony enough to make most people's skin crawl. They do harm in healthy organizations.

-- Peopleware (p.178)

Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.

-- W. Edwards Deming

Getting the Best out of People

Here's a list of random tips I've collected over the years to get the best out of people:

• Focus on strengths not weaknesses. Provide opportunity to use and develop strengths. Ensure each employee has interesting and challenging work tailored to their strengths.
• Drive out fear and build trust. Provide a nurturing work environment: respect, trust, integrity, support, openness, value learning. Encourage risk taking. Support learning from failure. Satisfy a desire to grow and create. Long term focus. Encourage individuality. Reduce stress. Make it fun.
• Listen.
• Empathize. See things from the perspective of others.
• Set realistic deadlines.
• Provide ways to achieve personal goals inside organisational goals.
• Remove blockages and unnecessary administration and bureaucracy.
• Provide excellent working conditions. Good quality chairs, computers, well-stocked kitchen, ...
• Allow and encourage staff to customize their workspace to suit them.
• Notice when people do good work.
• Build effective teams.

Other Articles in This Series

• Nobody Expects the Agile Imposition (Part I): Meta Process
• Nobody Expects the Agile Imposition (Part II): The Office
• Nobody Expects the Agile Imposition (Part IV): Teamwork
• Nobody Expects the Agile Imposition (Part V): Meetings
• Nobody Expects the Agile Imposition (Part VI): Architecture
• Nobody Expects the Agile Imposition (Part VII): Metrics
• Nobody Expects the Agile Imposition (Part VIII): Software Craftsmanship
• Nobody Expects the Agile Imposition (Part IX): Culture

References

• Performance Appraisal (wikipedia)
• Management by Objectives (wikipedia)
• W. Edwards Deming (wikipedia)
• Abolishing Performance Appraisals, why they backfire and what to do instead by Tom Coens and Mary Jenkins, foreword by Peter Block
• Appraisals and Compensation by Mary Poppendieck
• Train-wreck Management by Mary Poppendieck
• Peopleware (wikipedia)
• Top 10 Reasons to Work at Google
• The Dunning-Kruger effect
• Performance Reviews by Jeff Sutherland
• Review Process for Agile Team Employees by Christophe Louvion
• Performance Previews by Sam Culbert
• Abolishing Performance Appraisals
• Performance Reviews Banished
• Performance Previews, Teamwork, and Other Corporate Drivel
• On Finding, Hiring, Inspiring and Keeping
• Annual Self Appraisal forms and all this (censored)

References Added Later

• Measuring programmer quality by deorth (2007)

Updated 12-nov: Added new Perl Monks reference (thanks Jenda).