Organizations typically use performance evaluations to measure employee performance, establish performance goals, and, if appropriate, approve salary increases. Traditionally, responsibility for rating an employee is delegated solely to an employee’s direct supervisor. Supervisors are provided a performance evaluation instrument developed by a Human Resources Department and approved by top management. Oftentimes, supervisors receive little if any formal training on how to rate job related competencies and/or communicate the results to an employee. I once had a line supervisor come into my office in tears. When asked what the problem was, she said she had to evaluate her staff and was fearful of doing so. She had never been trained on how to complete the evaluation form and was afraid employees would no longer like or respect her. As you will see, she is not alone. Employee performance appraisal is an annual process that triggers dread and apprehension in the most experienced, well tested managers.
Despite employees saying they want to know how well they are doing, employees receiving appraisals are known not to look forward to the experience. In fact, research has shown that employees enjoy performance appraisal about as much as a trip to the dentist, but at least the dentist gives them something for the pain. If not done properly, performance appraisals can create anxiety and cause an employee to worry about their job security, organizational fit, promotability and possibly unfair or biased ratings. In “The Top 50 Problems with Performance Appraisals” by Dr. John Sullivan, Talent Management and HR, Jan. 31, 2011, he provides a list the most serious performance appraisal problems:
· Focus on the person rather than assessing actual performance.
· Infrequent employee feedback to address performance problems.
· Non-data-based assessment that relies 100% on memory.
· Lack of effective metrics.
· Lack of manager accountability for not providing accurate or job related data.
In my experience and review of various performance appraisal methodologies, there is no magic bullet for doing employee evaluations that make everyone happy. It’s important to note that performance evaluations are not even mandated by the U.S. Department of Labor. So why do them if they are merely a matter of importance to management and employees. The short answer is they are essential for organizational efficiency and effectiveness, employee morale, labor relations, and the quality of an organization’s work life. If done right, they can be an excellent means for communicating with employees about organization goals and mutual expectations, obtaining employee buy-in, recognizing and rewarding outstanding performance, and even strategic planning. They also can be used by both management and employees to either support or challenge disciplinary actions. According to Derek Irvine, “What do employees really think about performance reviews?”, TNLT, Sept. 2013, 78% of employees surveyed say what they want from a performance evaluation is help developing skills and correcting problems. In addition 90% of employees see positive feedback as more motivating.
The current private sector and non-profit trend favors utilization of a 360-Degree Performance Assessment. 360-Degree Performance Assessments are a process through which feedback from a supervisor or manager’ subordinates, colleagues, and other stakeholders as well as if appropriate a self-evaluation by the employee themselves is obtained. Whereas the traditional manner of evaluating an employee’s performance is the responsibility of the immediate supervisor, the 360-Degree Performance Assessment involves multiple internal and external stakeholders. This approach is believed to be more inclusive, is focused more on positive rather than negative attributes, identifies areas for improvement, and promotes teamwork amongst the various stakeholders. The process solicits feedback about an employee’s behavior and performance from a variety of points of view. Studies suggest that over 1/3 of U.S. companies use some type of multi-source feedback. Others estimate that closer to 90% of all Fortune 500 firms do this. This has been fueled as internet-based services have become standard in corporate development.
There is a question about whether or not 360-Degree Assessments should be used for employee development and performance evaluation. Concerns have been expressed about feedback providers’ motivations and subjectivity, differences in raters’ perspectives of the work performed, and if raters can fairly evaluate attainment of work goals and organization objectives. I have been told by one municipal executive that 360-Degree Assessments can be the perfect opportunity for disgruntled employees to take potshots at supervisors and managers. Whereas these assessments can potentially affect opinions about the need for employee development, they certainly could influence future employment decisions and ultimately result in litigation.
Organizations need to remember that 360-Degree Assessments are intended to develop leadership talent. They are not intended to take corrective action against an employee. If used to take corrective action, it will be viewed negatively and met with trepidation and resistance. A 360-Degree Assessment needs to be viewed by all employees as a welcomed tool for soliciting honest and candid rater feedback from diverse stakeholders that will be helpful to an employee learning and developing new skills. As with traditional Performance Evaluation processes, 360-Degree Assessments requires employee buy-in, an implementation plan, investment in proper development of the assessment tool, open and transparent communication with employees, rater education and training, periodic assessment of the tool, and rater anonymity and confidentiality.
Research has shown that 360-Degree Assessments and performance appraisals get at different outcomes. This suggests that traditional performance appraisals as well as 360-Degree feedback should be used in evaluating overall performance. The more feedback on employee performance an organization gets the better. My experience with both traditional Performance Appraisals and 360-Degree Assessments has been they both are valuable to the organization and employees if properly developed, implemented and taken seriously by top management, employees, and employee representatives. I am reminded of a conversation I had with a labor representative of a major transit system. He said that their union is also concerned about poor performing members. A bad employee is often a bad member of a union or association. The 360-Degree Assessment takes more time and cost more money than a traditional Performance Assessment instrument. I am currently working with an organization that has used the traditional instrument in a very productive and constructive manner. Annual reviews are conducted and semi-annual progress reviews are regularly scheduled. This approach has been very effective in building trust, improving communication and supporting succession planning.