Tuesday, August 4, 2009

Evaluating Evaluators

"Possibly the biggest issue, however,is that performance appraisals focus on precisely the wrong thing: individuals."

Jeffrey Pfeffer, "Low Grades for Performance Reviews," BusinessWeek, August 3, 2009.

Pfeffer draws this conclusion after demolishing performance reviews as objective measures of employee progress. Of course there is the rater bias of managers; employees learn how to game their managers; and such appraisals don't work easily with some jobs like R&D.

"The main beneficiaries of traditional employee evaluations are the consulting firms that try to improve the fatally flawed practice and the sofware providers that make it more efficient."

Saying we should use team or system appraisals like at Toyota is not as easy as it sounds. Organizations have to first work in teams and then must have a comprehensible system of incentives that reward team performance. And there are the sticky problems of promotion and raises. Should everybody on the team face the same fate? That seems unAmerican.

In the meantime, Pfeffer suggests that: "A recession is a good time for managers to focus more on evidence and less on received wisdom or old habits."

What about coaching?

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