Perhaps There is a Road to Sanity: Eliminating the Performance Review

Spoke with my pal, Bubba, recently.  You might remember Bubba - he got into some hot water when he aroused some of barking dogs at his company.  A couple of them actually bit him, though the scars have faded.  He was subjected to the asidiculousness (a portmanteau word resulting from combining asinine and ridiculous) of being punished by his management's use of the org's performance management system as the vehicle.  A PMS is bad enough, but when it is used punitively, it becomes even more inane. 

Bubba took it upon himself to bring the absurd system to the attention of a vice president at his company, fully expecting that it would be received with a "Thanks a lot....we'll look into that."  What he found was that his email to the VP was actually forwarded on to a manager in that dirty little secret department called HR.  Below is the chain of emails...Bubba redacted the names because, while he is brave, he isn't foolish, for the most part.

Enjoy...with more to come as the story unfolds.  Who knows, maybe Bubba will be remembered for some valuable contribution at his work if he can get this PMS eliminated.

Third Email

To: VP

From: Bubba

Subject: Performance without Appraisal

Thank you for taking initiative to send my thoughts on to HR, VP.  I will be very curious about where it goes.

I read through Chapter 8 Performance Without Appraisal in Peter Schotes’ The Leader’s Handbook.  He was a protégé of Deming so his thinking aligns much with Deming’s systems view of work.  He offers sage advice on the alternatives to performance appraisal (it is detailed and occupies the latter half of the nearly 70 page chapter.   Basically, he advocates debundling of the performance appraisal process with a focus on the following:

• Focus on improving systems, not rewarding or punishing people
• Focus on customer satisfaction, not management satisfaction (and truly appreciate who your various customers really are)
• Don’t suboptimize an overall system by over-optimizing one or more parts of it
• Don’t make the cure worse than the disease (to change the system, it must be accepted and understood why and how it is flawed)
• Don’t just write a different verse to the same song; the current paradigm must be abandoned in favor of transformational change.

Elimination of this disease will require a change in “our culture” but this cliché is often at the heart of why we cannot change.  It will require our abandonment of not only Theory X management thinking, but Theory X management policy.  I suspect that we have a lot of closeted (and some open) Theory Y and Z managers here, but that thinking is not reflected at all in our policies and systems.  Our arcane performance management system is really a monolithic testament to our collective management beliefs that:

• Many of our problems result from individual dereliction and inadequacy (which Deming characterized as special causes of variation rather than variance that is systemic aka common causes of variation.  95% of variation is common caused.)
• Work success requires holding people accountable for achievement of measurable goals (accepting that a significant portion of variation is systemic, successful work requires consistent and reliable systems, processes, and methods that are continuously examined and improved by the people who actually use them.  Carrots and sticks do not improve systems and therefore have no appreciable effect on the org’s performance)
• People withhold effort and they must be coaxed or coerced to deliver it (the old “get your feet off your desk and get to work!!”  The traditional thought is that incentive pay programs do this, except that the nature of any system proves this to be a fallacy.  People are motivated by most anything other than money as discussed by Dan Pink in this video: http://vimeo.com/15488784.)
• Managers are responsible for motivating and controlling the workforce (this is so Tayloresque and Skinneresque that it should require no discussion.  Managers must tend to system issues that actually demotivate the workforce, and the performance appraisal is, ironically, on the major ones.)

We talked about legacy recently.  My greatest legacy would be to have a hand in the elimination of this really badly flawed system.  I hope it comes about.

Second Email

To: HR Manager

From: VP

Subject: Performance without Appraisal

Hi HR Manager,

Some time ago (a few years, at least), I met with some folks in HR and offered that we should eliminate the performance appraisal system. I believe that we can address performance assessment via things like:

• Leadership competencies
• Job description
• Job expectations

The actual performance management system is an unnecessary, bureaucratic process.  Can we discuss at some point?  The item below was shared with me just this week…..I am sharing it FYI…because I think it has some good points that are pertinent to what I would like to discuss with you…

VP

First Email

From: Bubba

To: VP

Subject: Performance without Appraisal

Hi VP,

It’s late on a Friday afternoon and it is a dangerous time for me because I have time to think…and think.  I’m interested in your thoughts about this subject.   If this gives you a headache, you can always amuse yourself with this from Forbes: 9 Dangerous Things You Were Taught in School.

A person came to me Thursday with a concern – a dilemma, really.  She related the travails of a colleague who had just been through the annual performance appraisal and was “decimated” in her words.  I know her colleague and I respect him.  I don’t know all the details of his sordid experience, of course, but what resonated with me was her comment: “Why do we insist on following such a horrifically demoralizing process (the performance appraisal process) that really serves no value and only causes dread??”  I had no answer for her, except the lame old “I suppose because that’s the way we have always done it.”

Mary Poppendieck, author and authority in lean software development, wrote about the dysfunctionality of the performance appraisal process in this article: http://www.poppendieck.com/pdfs/Compensation.pdf.

John Hunter, who has the Curious Cat management blog, writes quite a bit about W Edwards Deming and he offered some insight: curiouscat.com/deming/performanceappraisal.cfm. 

Hunter writes: The idea of eliminating performance appraisals is one of Deming's ideas people have the most difficulty with. I can't convince anyone of the merit of this idea here. For years I thought this was one idea Deming just got wrong; but now I believe he was right. I suggest what Deming suggested, listen to Peter Scholtes: read chapter 9 of the Leader's Handbook - Performance without Appraisal.  I have that book and I am going to review those pages again.

Deming, of course, was highly critical of any performance management system and he listed it as #3 of his 7 Deadly Diseases of organizations.  He was blunt about his thought of it in his seminal book Out of the Crisis: The performance appraisal nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry and politics… it leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior.

It is unfair, as it ascribes to the people in a group differences that may be caused totally by the system that they work in…Basically, what is wrong is that the performance appraisal or merit rating focuses on the end product, at the end of the stream, not on leadership to help people. This is a way to avoid the problem of people. A manager becomes, in effect, manager of defects. 

A few years back, we even had a Six Sigma trainer come to our company to train a room full of managers where he asked if we still used “that horrible performance management system” here.  You could have heard a pin drop in that classroom!!   Perhaps not surprisingly, he was not invited back.

I read the Deming book passage to attendees at my workshops, but I omit the first few words (The performance appraisal…) and I ask them to what Deming is referring.  Almost always, a person comments pretty quickly “the annual performance review” or something similar.  Then most others nod in agreement.  Of course, many don’t know any other system, but they abhor it.  I have had numerous managers concede that that they feel the process is, at best, unfair and insufficient, but they have no other recourse.   A few have openly admitted to me that they feel it should be abolished 

My question: why haven’t we had serious discussions about the insanity and inadequacy of this problem? Of course, people will counter with “Well, what is the alternative??”  Deming offered several see below) and Sholtes and others have, too.  

• Institute education in leadership; obligations, principles, and methods.
• Be more careful selection of people in the first place.
• Offer better training and education after selection.
• Instead of being judges, leaders need to be colleagues, counseling and leading people on a day-to-day basis, learning from and with them… working for the improvement of quality
• The people that form the system will be subject to the company formula for raises in pay. There should be no ranking within the group.
• Discover who falls outside the upper and lower limits of the system tolerances, and reward/address accordingly.
• Hold long interviews with every employee, three or four hours, at least once/yr., not for criticism, but for help and better understanding on the part of everyone.
• Figures on performance should not be used to rank the people that fall within the system, but to assist the leader to accomplish improvements of the system.

Thoughts on what we can do about this?

Dealing with Occupiers

If you have seen Saving Private Ryan, you probably recall in the movie where the men of Charlie Company of the 2nd Rangers, in their quest to find the elusive soldier and last surviving Ryan son (James Francis Ryan), sort through an array of 82nd Airborne dog tags.  As the 82nd Airborne walks by en mass, C Company members playfully trivialize their activity by throwing some of the tags around and mocking them as poker chips. That is, until Charlie Company's medic, "Doc," jumps in and says basically "WTF, these aren't poker chips!!  And the whole Airborne is watching! Put them away!" 



That's what happens when people are given a mission where the purpose seems trivial...valueless...and even counterproductive.  It often happens when foreign armies come into a country and occupy, even in the name of liberation or defense (Afghanistan, anyone??)  Such is the case of what is happening at a company with which I am familiar.  They have initiated a huge endeavor and they have brought in a foreign army of contractors to fight for the cause.  This has left at least some of the citizenry of the organization variously suspicious, ambivalent, fearful, disconsolate, and perhaps all of these to some extent.  Some employees might well feel like soldiers in the 82^nd Airborne as they walked past Charlie Company’s silliness and levity.

The parallels to the occupying force allegory are vast in this instance.  While the intentions of the occupiers are arguably sincere, there are subtle instances of actions and words that betray this sense.   For instance, one person overheard one in a group of contractors comment that he would rather be somewhere else.  I’m sure some of the org’s employees thought he should also be somewhere else. 

Also, the org’s leadership has done little to reassure its employees about the nature and purpose of bringing in so many contractors.  It has left the impression among at least some employees that they are inadequate in skill and ability to do the work.  Few reassurances have come forth.  Also, some employees have literally little or nothing to do in the face of this enormous amount of work that faces their employer.  They feel insecure, underutilized, and vulnerable and little support has been forthcoming to assuage these feelings.  Finally, some or perhaps even many of the occupiers seemingly have little regard for the company’s culture and legacy – its norms, behaviors, etc. – that have been in place for quite some time.  This causes frustration and consternation among the employees and does little to build relationships.

Like foreign interventionists, the contractors hunker down in areas where they can associate together and share derisive and sarcastic comments, often in ear shot of employees.  This behavior does little to endear them to the natives.  Like foreign occupiers, their occupation time will come and go and they will leave little behind of influence.  But their demoralizing effect can already be felt.  Interestingly, this organization has long had a rather large contractor population, some of whom have been there for 10 years and even longer. They have assimilated well, somewhat like being accepted as immigrants into a country.  The “new breed,” which seem to be of a haughtier species, is seemingly more distant. 

It will be interesting to see how this occupation plays out.  The nature of the newly adulated, company saving program has incubated an environment fraught with anxiety, uncertainty, skepticism, and a belief in magic, mixed in with bridled optimism and plain old realism. It will, ultimately, be a grand experiment and a most interesting spectator sport.  I wonder who, if anyone, will play the role of Doc in this instance and tell the occupiers to quit playing poker with the employees' dog tags.  Anyone??