Challenging the Status Quo of Performance Assessments

Challenging the Status Quo of Performance Assessments. The conventional wisdom surrounding the indispensability and motivational power of superior-conducted People Performance Assessments persists, serving as a cornerstone for decisions on variable pay, bonuses, promotions, improvement plans, and feedback mechanisms. However, it is truly remarkable how resistant this formal performance assessment myth is to change or elimination.

Echoing the sentiments of Deming, who voiced his concerns over three decades ago, experiences within organizations and recent scholarly discourse, particularly in outlets like HBR, have raised serious doubts about the viability of this practice. Despite a few exceptions and modifications to the traditional compliance interview model, formal performance assessments endure, with managers citing a lack of alternatives.

The persistence of this state of affairs is not only astonishing but also perplexing, considering the myriad issues associated with current performance assessment methodologies. It is indeed mind-boggling to contemplate how these practices have survived.

Deconstructing the Myth:

To debunk this enduring myth, let’s delve into the fundamentals. In alignment with Deming’s perspective, performance assessment should exclusively evaluate performance, divorcing it from the entanglements of promotions and pay decisions. The practice of linking past performance in one role to future success in another is, as they say in financial circles, an unreliable indicator of future performance—a compelling argument for decoupling.

Numerous studies over the years have failed to establish a positive correlation between pay and performance, particularly when job requirements transcend basic tasks. This further strengthens the case for decoupling, highlighting the flawed nature of the existing paradigm.

Navigating the Minefield of Performance:

The core challenges lie in defining what constitutes performance, who should conduct the assessment, and what should be done with the outcomes. The prevailing schools of thought—achievement of set targets (KPIs) and the inclusion of psycho-social factors—both present serious problems. The former measures compliance, not true performance, while the latter conflates traits and behavioral issues with performance, better addressed as organizational culture matters.

Defining Performance:

For employees, subject matter experts, and managers alike, performance hinges on competence—statistically stable processes—continuous improvement through reduced complexity, and the ability to innovate. This perspective renders conventional measures like 360 assessments and KPI achievements irrelevant and damaging to actual performance.

Redefining Assessment:

Shifting away from hierarchical thinking, genuine performance assessment should be continuous, managed, measured, and improved by each process owner. Output quality and value should be evaluated continuously or upon inquiry by relevant performance stakeholders.

The Role of Strategic Managers:

Strategic managers must ensure the ongoing execution of this dynamic performance management approach, providing necessary support, tools, and competencies, abandoning the outdated notion of a separate management exercise for formal performance assessments.

Conclusion:

In conclusion, the urgent need to abandon the ineffective and demotivating practice of formal performance assessments is evident. Embracing a continuous performance management approach, as advocated by Deming decades ago, holds the key to unleashing the true potential of individuals within organizations. The recommendation is clear: scrap formalized performance assessments swiftly, as they serve no valid purpose and hinder rather than foster organizational success.