The questionable value of a performance rating

We are in the midst of the end of year performance review process at my organization.   I am sure many of you can imagine what we are going through: we write self-reviews assessing how we think we did over the past 12 months and submit them to our managers; if we are managers, we request feedback on our direct reports from others who work with them; we also read our direct reports’ self-reviews, and use that, along with feedback from others and our own direct experience, to triangulate on an overall performance rating; we then write up our managerial review to share with our directs, and have a conversation about it.  Inevitably there are differences of opinion, and very little hard evidence to point to, no matter how rigorously I try to define success with my employees at the beginning of the year.  Circumstances change and in our environment very little is delivered by an individual working solo – the vast majority of deliverables, successful or not, are a combined effort of multiple people.  This makes it pretty difficult to assess individual contributions to success and performance.  Nonetheless, I personally have found a great deal of value in the process itself – I appreciate the time to pause, reflect on what I have done and not done, and see what I can learn from that.  I particularly value the feedback I receive from my colleagues and manager.  I also appreciate the discipline this process requires of me as a manager – knowing it is coming at the end of the performance year (in our case, in June) is a forcing function to ensure I give feedback to my directs along the way, so that I don’t violate my own rule of no surprises at review time.

All that being said, the actual outcomes of the process don’t live up to my hopes.  In particular, reducing people’s performance over the course of year to a single rating, even if accompanied with a thoughtful review, is difficult.  So much is riding on that rating – identity, self-esteem, and financial rewards.  It is not surprising that there are often disagreements about how to assess performance, with so much skin in the game.  I wish it were different.  I wish it were more about learning and upping the game, growing the skills, increasing capacity.  I think the single rating undermines the learning frame.

Just recently someone I work with gave me a copy of a recent HBR article titled “Reinventing Performance Management.”  I was delighted when I realized that one of the authors is Marcus Buckingham, one of my favorite business book authors whose research has emphasized the value of growing people’s strengths to achieve high performing organizations.  (The other author is Ashley Goodall.)  As with Buckingham’s other work, the article presents empirical evidence on the experience of high performing teams to derive questions that are more meaningful for assessing how someone is doing, questions that are quite simple:

  1. Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus – 5 point scale from “strongly agree” to “strongly disagree”
  2. Given what I know of this person’s performance, I would always want him or her on my team – 5 point scale from “strongly agree” to “strongly disagree”
  3. This person is at risk for low performance – yes or no
  4. This person is ready for promotion – yes or no

These questions are better predictor of performance than having raters assess someone’s skills or contributions directly, it turns out.  Why?  Because assessing someone else’s skills is subjective – the vast majority of the variation across individual performers from this method is due to variation in the raters themselves, not to actual performance variation. The questions listed above are about the rater’s future behavior, what they would do – behavioral, rather than subjective, and something they know much better.    They are short, easy, and can be assessed at any time.  They provide a snapshot of performance at a point in time, rather than an attempt to assess an entire year’s worth of performance in one rating.   You could assess performance quarterly, at the end of project or engagement, whenever it made sense to do so.

The answer to the questions may not be something a manager wants to share transparently with the person being assessed.  But, and this is not part of the article, I think it is particularly useful to ask a rater (including yourself) why they gave the rating they did. This feedback could be shared with the individual, on a regular and much more frequent basis than during an annual performance review.  This makes the process a bit more involved, but also more honest.  If I answer “yes” to question number 3, I owe it to the person to consider what is behind that, and clearly communicate what needs to change. Similarly, if I answer “strongly agree” to number 1, as a manager I will better supporting growth in performance if I reinforce the positive contributions and behavior I see.

Regardless, the idea of moving away from an annual process of review and feedback makes a great deal of sense – as does reducing someone’s performance to a single rating.  Anything we can do to bring more learning and growth to the process.

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4 Responses to The questionable value of a performance rating

  1. Laura says:

    Thanks for writing on this topic, Eleanor. I so fully support the need and value of performance feedback, but have yet to find a process and system that I think works well. I like the ideas behind the book you referenced. I am in an organization that doesn’t yet have a system, but I am being asked to help develop one. I would love to talk with you more about it!

  2. Great article, Eleanor. Let’s get coffee soon, catch up, and chat about this and other topics. -Michelle

    • Eleanor Bell says:

      Hi Michelle, thanks for reading! would love to get together. Send me an email with some possible times. -Eleanor

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