You're in the Trust Business; Not the Box-Ticking Business
I was chatting with a friend recently who works in the non-profit sector.
Cathy, she asked, what do you think about performance appraisals? What are you seeing that's working better? Is it a process we can let go of and how do I convince our trustees?
When the topic of performance appraisal comes up with my leadership clients, they tell me it's about the conversation, not the box ticking. And of course, that's right. They're not running a maths test for their staff—there is no 'right' answer or one-size-fits-all grading. It's always personal and therefore it's always the quality of the conversation that matters.
There's a deeper question, though, that I think it helps to remember from time to time,
Why do we have performance appraisals? Are they fit for purpose, or should we replace them? And with what?
The answer to that changes everything.
Back in the day when I worked for large organisations, performance appraisals were the mechanism for awarding pay increases. The 'better' we did, the extra couple of hundred pounds we saw at the end of the month.
Performance appraisal systems became linked to pay because it looked as if that was the way to motivate staff. The business journals wrote about it, the private sector led the 'bonus culture' vanguard and the public sector followed with its own poor imitation.
It was always subjective: did we fit in, did we step up, did we feel motivated enough to want to contribute our best, and did our managers see the value of the contribution we were making?
It looked as if the ends justify the awkwardness of the process: better motivation = better outcomes.
And, it turns out, the ends don't justify the means; pay structures don't motivate staff. Even if a small, short-term effect can be shown, there is zero long-term correlation. In fact, some studies show that pay differentials can be de-motivating. That sounds like the worst of all worlds!
The Process Then…
So it's the conversation then?
Not the box ticking?
Yes, to some extent that's true; the best managers use performance appraisal as an opportunity to have a conversation about staff development; the 'score' is irrelevant.
The worst, though, feel intimidated by the thought of an honest conversation and use the process to justify some decree from on high, rather than connect person to person. It becomes code for 'checking up on people'.
At best it feels like a slightly forced conversation, at worst it's a divisive box-ticking exercise
Even the best managers aren't always equipped to treat the process as a real opportunity for development. And it's easy to see why—the subordinate is being judged. Any parent will know that judgement (even with the kindest intentions) doesn't set the right tone for an honest conversation!
What Else is There?
I wanted to go deeper in the conversation with my friend.
Why was her organisation clinging to outmoded systems rather than creating the open and nurturing environment she was seeking?
Was it because she didn't know what a better system for building trust and communication with staff would look like? Or was it because she couldn't justify it to her superiors? Or even herself?
The Trust Business
In my small business, I don't have a lot of staff or systems. I work with contractors who either bill me per hour or bill me by results. And yet, I rarely find it necessary to check whether, and how, those hours were actually used. When we talk, we talk about the work.
I trust my team. No, more than that I love my team. I have staff who are committed, who show initiative, who are intelligent, careful, and caring.
I don't think this is a coincidence. I think this describes how most people behave if we connect with them human to human.
Of course, I could make up some system for scoring and rating my staff, but why would I? We all have good days and a few off-days when we function below our best. We all make mistakes from time to time—we're not doing it intentionally—and I try not to judge by mistakes, I want people to learn from them.
Now, I'm not saying I would put anyone in any role and life would be perfect. Of course, some of us have skills and interests that are a better fit for certain roles than others.
I do know, though, that most of us over-think how to manage staff, and organisations that put in place complex performance appraisal systems are forgetting that they are working with people, not with machines.
Human to Human…
There are certain standards we expect to be met in the workplace: transparency of pay, consistency across experience, qualification and responsibility levels.
Organisations need to be accountable to regulatory bodies, to demonstrate compliance with the law, fairness, and best practice.
The culture starts at the top and it’s the leader who understands where performance comes from and works to enhance the capacity of everyone to do their best work, not the one who is in the business of making judgements, who will create a positive, innovative and self-reliant work environment.
Trust comes from connection, which comes from seeing the potential of people, caring deeply, treating people as equals, as grown-ups.
When we've found the balance inside ourselves, and we can be open with others, then our communication comes from a place of curiosity and compassion.
When we're able to listen deeply and speak honestly, in the bad times and the good, it's easier to separate performance from worth, it's easier to recognise difference and reward contribution.
Who among us wouldn't rather work somewhere like that? I know I would.