Some recent research* has given me (and others) even more reason to deep-six performance evaluation. My disdain for this annual ritual appears in Leading from the Middle
, especially Chapter 34: “I’ve Closed My Eyes to the Cold Hard Truth I’m Seeing: Making Performance Appraisal Work”.
The new research
states that the bell curve concept of staff evaluation is dead wrong. How people perform on the job does not fit under a bell curve; they perform along the lines of a “power distribution”. According to researchers Herman Aguinis & Ernest O'Boyle, “the entrenched notion of normality -- notably in performance evaluations that force managers to assign only numeric or category ratings -- is detrimental to individuals, the group and the larger organization.”
Caption: Some detrimental behaviors under "rank and yank" appraisal.
What is the power distribution law? Also called the 80/20 Pareto Principle, it never fits the bell curve. The power law is manifest in that 80% percent of wealth is held by 20% of the population. In libraries, 80% of use (of any kind) will come from 20% of its users. And for bloggers like me, alas, 80% of the hits will go to a mere 20% of the zillions of blogs out there. According to an authoritative interpretation
of the power law, “The rest of the field” (that’s 80% of us!) “sits in a long, almost-irrelevant tail.” The 20% are the “vital few” and the rest of us are the “useful many.”
Corporate America was (and, some say, still is) ga-ga over “forced distribution” of performance evaluation. What’s coerced is the manager, who is given no choice but to rank people along a three or five point scale. For example at GE, under Jack Welch, managers annually had to stick people into one of three slots: 20% top, 70% middle, and, 10% need improvement. The bottom 10% was let go, hence the term, “rank and yank”.
In my administrative career in higher education, we used what might be called a forced distribution of another kind; we tended to rank too many people as “exceeding expectations” and too few “not meeting expectations”. We dished out mostly praise and skipped the constructive criticism, hence the bulge in the upper rankings. When I pointed this out to my peers, they saw nothing unusual because by virtue of recruitment to our organization all of our staff was above average! Perhaps, but when we chose to avoid confrontation and knowingly gave better than passing grades to underperforming staff we were doing a dis-service to the individual and the organization.
There is a negative aspect to the power rule: it applies not only to the super-good, but also to the super-bad who can break the organization through unethical behavior; a few rogue staff can bring an organization to its knees.
Applying the notion that a few can light up or take down an organization, Aguinas and O’Boyle say: "If, as our results suggest, a small, elite group is responsible for most of a company's output and success, then it's critical to identify its members early and manage, train and compensate them differently from colleagues.”
However, “changing theory and practice will be challenging, due partly to deeply entrenched notions of fairness and equality in society and business.”
My first gleeful inclination is to do away with the one-size-fits-all appraisal ritual for the useful many who do a good job regardless. (By the way, I yet have to discover any evidence that performance appraisal improves performance. Forced distribution advocates claim improvement but that is more likely from the short-term uptick one gets from inducing gut-wrenching fear into an organization.) Instead of the annual dreaded evaluation ritual, I think all staff should have regular conversations with their supervisors or team leaders about why they are in the organization and what they want and need to make themselves and the organization better. In one organization in which I supervised about a hundred staff, I was able to get rid of performance appraisals. The result over five years was increased conversation among staff and supervisors, increased productivity, and large amounts of time saved for real work.
What about the super stars? Should they be treated differently from other staff. I do not agree with the researchers in setting them up as an elite. In my experience, super stars are motivated more by internal factors than by any organizational motivators. Certainly we should remove any barriers to their development, and we should set them free, but I very much want them influencing other staff and working side by side with the "useful many" in taking on organizational challenges.
*Herman Aguinis & Ernest O'Boyle, "The Best and the Rest: Revisiting the Norm of Normality of Individual Performance," is published in the spring 2012 issue of Personnel Psychology