Performance Management - why is it so hard?

Ask a group of employees how many of them would rate their performance and skills in the 90th percentile or more. Even though statisticians will tell you that only ten percent people should see themselves in the top performer category, yet whenever I have done this exercise with groups of executives, the overwhelming majority rates itself at the top. Now imagine the plight of the manager who has to appraise the performance of such a group of employees and you know that such a conversation is not going to be easy.We all suffer from “confirmation bias” which is a tendency for people to gather evidence and recall information from memory selectively, and interpret it in a biased way. The biases appear in particular for emotionally significant issues and for established beliefs. Our view of our own work is no exception. We tend to judge our efforts and outcomes based on a belief that favors us.It’s not just in the workplace that we judge ourselves generously. When the weighing scale tells us that our weight is more than what it ought to be, we blame the scale. When a psychometric instrument tells us something about ourselves that we are uncomfortable with, a person will question the design of the instrument.A Lot at StakePerformance appraisals are, perhaps, the most controversial of all processes. Not only is it a time when someone sits in judgment about the quality of your work, but eventually, reward and recognition gets linked to it, and so does the development effort that companies are willing to invest. No one likes to be left out of the room when money is being counted. Appraisals are not just an exercise in data and evidence, but it is largely about the soft skills of the manager.Appraisals are opportunities to have ongoing conversations between the manager and the employee. Unless there is trust in the relationship, the conversation lacks honesty and sensitivity.Setting GoalsThe goals that we set are also meant to inspire and motivate action. So the foundation for good performance appraisals lies in setting the right number of goals. I have seen most leaders tend to focus best when they have four to five well articulated goals.What I Have Learnt About Goals1) Slightly difficult goals tend to motivate people more than easy goals. A stretch goal combined with ongoing coaching conversations with the manager is the best development tool possible.2) Ensure that critical goals are aligned with what we are naturally inspired to do. Ask if the goal will leverage the strength of the individual.3) Along with the goals, if the manager and the employee agree on a monthly schedule to review progress, it is a great way to ensure that the employee and the organization get the best out of the experience.In ConclusionPerformance appraisal is a tool. The skill of the manager determines the quality of the outcome. The ability of a manager to set goals that are meaningful is a skill. If the manager and employee have monthly reviews of the progress, any deviations from the expected results are detected early. If the appraisal discussion generates more heat than light, then it may indicate that the appraiser has not tracked feedback throughout the year, and shared it with the appraisee.Imagine a scenario when someone discovers after a year that his or her manager always felt that the performance was not up to the mark. This is the most common scenario that leads to bitterness. While the poor performance may be a reflection of the appraisee’s effort, capability and competency, let us not forget that the reaction of an appraisee is a reflection of the manager’s skill as a coach and enabler.The intent behind the appraisal is to foster more frequent conversations between the manager and the employee. Without frequent discussions on the what, why and how of work, it can never be motivating enough. Appraisals are not about receiving judgment on the final output. It is about getting feedback and jointly working to improve each step along the way.---------------Join me on twitter @AbhijitBhaduri