Re-appraising appraisals

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Written by Colette Reed on 1 July 2013 in Features

Traditional performance appraisals are relics of the 20th century, says Tim Baker

It's 9am on Monday and Bob is sitting in Terry's large office; the early morning sun is streaming through the half-closed blinds and casting some shadows across Terry's big black shiny desk. It's annual performance review time. Everyone is on their best behaviour. There is a degree of tension and apprehension around the office. In the chair opposite Terry, Bob looks like he is sitting in the airport lounge, having just been told that his flight has been delayed an hour and it is already 10:30 at night.

Terry - Bob's boss - isn't feeling his best either. He is a little apprehensive about appraising Bob's performance. As Terry is reading through Bob's self-appraisal behind his barricade, Bob sits with a look of disinterest on his face, chewing a piece of gum, arms folded, staring straight ahead into the distance.

"I notice you have put administration down under your strengths," says Terry, reading out Bob's response. "Yeah," replies Bob unenthusiastically. "But administration is your job, isn't it, Bob?" asks Terry. Bob nods indifferently, staring straight ahead. "No, Bob, I am looking for what you think your strengths are within your administrative job. What are your strengths as an administrator? Is there anything else you could have put there?" Terry probes. "Don't know, really, isn't it your job to tell me?" replies Bob, continuing a steady chew on his gum. "Okay, under weaknesses you have put hay fever," a deadpan Terry says, reading from the self-appraisal form.

"You've left this section completely blank, Bobby. You haven't done the section on career goals," challenges Terry. "I thought you're supposed to fill that part in," Bob mumbles, looking at the floor.

"No, no, no, this is aimed at you, for heaven's sake. It's your career, not mine. On a scale of one to five, to what extent do you believe you have the necessary skills to carry out the job?" Terry asks, reading the next question on the appraisal form, looking exasperated as he reads out the six possible responses. "One, not at all; two, to some extent; three, reasonably competently; four, competently; five, very competently, or you can tick don't know. What would you tick?"

After a pause Bob replies: "Don't know."

"Okay," replies Terry as he ticks the box and takes a deep breath. "Do you believe you have received adequate training to use the new CRM software system installed recently?" he asks, still reading from the blank form.

"What are the options?" says Bob. "One, not at all; two, to some extent; three, reasonably competently; four, competently; five, very competently, or don't know. They are always the same," a clearly frustrated Terry responds.

"Don't know," comes the deadpan reply.

"Do you feel empowered to complete your work?" asks Terry, referring to the next appraisal question. After a long pause he asks: "Do you want the options again? One, not at all; two, to some extent; three, reasonably competently; four, competently; five, very competently, or don't know."

"Don't know," comes the predictable reply.

"Bob, just imagine for a moment that you didn't have the option of selecting 'don't know', what would you select?" Terry tests. "What are the other options again?" replies Bob. "One, not at all; two, to some extent; three, reasonably competently; four, competently, and five, very competently," says Terry in a forced, but controlled, voice.

"I bet you can't remember the question, Bob," he adds sarcastically.

You might be familiar with this scene as it was inspired by The Office1. It's somewhat exaggerated, perhaps, but nevertheless disengagement in the annual performance review process is happening across the world in every industry for a high percentage of employees and managers.

When I mention the term performance appraisal or performance review, what comes immediately to your mind? Of course I don't know what you thought, but I am pretty confident that the thoughts you have are not necessarily favourable.

Incidentally, I will use the terms appraisal and review interchangeably throughout this article.

Most managers are locked into the belief that they need to conduct annual or biannual performance appraisals with their staff. Yet they acknowledge that the system is not working. HR and L&D professionals are caught up in this dilemma: we have to train people to conduct their reviews competently, but acknowledge that the old approach is defunct. Not surprisingly, we witness a plethora of opinions about the traditional way we appraise employee performance.

Performance management is increasingly being spoken of in articles, blogs and management books and is a dominant topic of conversation at HR, HRD and management conferences all over the world. Most of the commentary is critical of the status quo; people in the people development business - with increasing impatience - are seeking answers to the perennial challenges of getting the best from people in their roles at work.

A new approach I refer to as the Five Conversations Framework attempts to respond to this disillusionment, particularly in relation to offering a comprehensible alternative to the old performance appraisal regime. As we appreciate the value of human capital in the modern workplace more and more, I hope you agree, fresh insights and new approaches to developing people at work are worth considering.

The conventional appraisal system is faulty on several accounts. My assumptions were confirmed after interviewing 1,200 managers and HR professionals over the past few years across all industries in Australia and New Zealand. I simply asked them to identify what - if any - shortcomings they had identified about their current appraisal approach. Responses varied, as you might expect, but essentially I identified eight themes from my research. They are:

  • appraisals are a costly exercise
  • appraisals can be destructive
  • appraisals are often a monologue, not a dialogue
  • the formality of the appraisal stifles discussion
  • appraisals are too infrequent
  • appraisals are an exercise in form-filling
  • appraisals are rarely followed up
  • most people find appraisals stressful.

These results confirmed to me that a completely new approach is needed.

I am not against performance feedback. In fact, I believe it is one of the most important things a manager should be doing. Organisational psychologists tell us time and time again about the importance of feedback and its link to performance improvement and motivation. You would be hard pressed to find a book on management and leadership that doesn't extol the virtues of timely, tactful and specific feedback on performance. Performance management is fundamentally important.

But the appraisal process is not working.

Essentially, the Five Conversations Framework is based on five conversations every six months between the manager and his employees.

Let's look at each conversation briefly.

The Five Conversations Framework

Climate review conversation

A climate review is about determining the current atmosphere in a particular workplace. It is mainly concerned with employees' job satisfaction, morale and communication.

Although people's opinions about these matters can - and often do - fluctuate over the course of a year, it can be useful to take a snapshot of the business occasionally. By having a conversation with direct reports about the state of the climate, managers have a handle on the current condition of the business, and what needs to be done to improve the fundamentals of satisfaction, morale and communication. Listening and responding to this feedback is a good place to start.

Strengths and talents conversation

Most appraisals are fixated with what is going wrong; in other words, they focus on weaknesses and bypass strengths and talents. Tom Rath, in his book Strengths Finder 2.0, underscores the value of a conversation on this subject: "Society's relentless focus on people's shortcomings has turned into a global obsession. What's more, we have discovered that people have several times more potential for growth when they invest energy in developing their strengths instead of correcting their deficiencies. "2

Apart from being an edifying place to start discussing performance after the organisational climate, this conversation capitalises on people's innate talents. As the positive psychology movement has preached for two decades, building upon strengths has a higher payoff than working on overcoming weaknesses.

Opportunities for growth conversation

This conversation invites an opportunity for employees to consider how they can improve their own work performance in key result areas. By doing so, the potential for both employee and manager to gain a common perspective on areas for improved performance is possible.

A dual understanding of current and expected standards of performance is an important first step. The second step is to discuss and agree upon some tangible ways and means of improving the employee's performance to match expectations. Thirdly, and finally, this conversation is important in aligning performance expectations with the strategic direction of the business.

Some opportunities identified can be put into practice straight away. And others can be adopted with more L&D support later.

Learning and development conversation

Conversations about learning and development capitalise on the previous two conversations. The core question here is what learning experiences can assist in building upon strengths and lifting performance in critical areas?

Learning experiences can be technical, personal development or problem-based. All three dimensions are important for an eclectic approach to HRD.

Innovation and continuous improvement conversation

This conversation is about practical ways and means of improving both the employee's own efficiency and effectiveness and the business in general. What can I, and what can we, do to improve? is the focus here. Imagine for a moment the power of this conversation occurring across an organisation during a particular month. Some of the ideas that surface will undoubtedly be too costly or impractical but some would also be worth considering.

Each of these five conversations ought to take about 15 minutes. Some go longer. Being thematically-based, they are focused and therefore need not take a considerable amount of time.

Being more relaxed and conversational than the rigid appraisal regime, this new approach minimises the power dynamic of the manager-employee relationship. The manager still asks questions to guide the conversation but, in this framework, his role is converser and facilitator, not appraiser and assessor.

Implications for L&D

One of the criticisms of the traditional appraisal system is the mountains of associated paperwork it generates. I think the truth is this: Documentation is as much about compliance as anything else. Each of the five conversations are recorded, but with simplified templates. These completed templates are then collated by HR and guide and inform immediate and long-term L&D opportunities.

More specifically, the climate review report is a useful snapshot of the organisation-at-large. This data can then be dissected to determine pressure points in the operation. Growth opportunities to enhance job satisfaction, morale and improved communication can then be addressed by L&D interventions. Information from the innovation and continuous improvement conversation is aggregated into a report highlighting some of the inevitable good ideas and improvements generated across the organisation. Once these fresh concepts are captured, they open up great opportunities for new L&D across the organisation. The conversation on strengths and talents is the catalyst for shifting the reliance of L&D on meeting baseline organisational competencies to building potential by capitalising on people's innate talents.

In other words, this new approach means the role of L&D is primarily one of organisational development rather than organisational conformity.

There is considerable chatter in the blogosphere about whether the performance appraisal should be abolished or refined. And if it is eradicated, what replaces it? If managers are giving consistent, regular, clear and constructive feedback to their charges, the old review process becomes less relevant, if relevant at all. This is more the case if we assume that the primary purpose of the review is a developmental tool for performance enhancement.

Several organisations have replaced their old appraisal system with the Five Conversations Framework. In applying it, each manager in these enterprises is committing to ten conversations with each of his direct reports every year. This is probably more dialogue than most managers are currently committing to in most organisational settings. And in these circumstances, why continue with the standard appraisal approach?

This alternative approach has worked successfully across many industry groups from manufacturing to professional services firms. Feedback from both managers and employees has been generally very positive. It also opens up fresh opportunities for L&D professionals.

Managing performance is a complex issue. On the whole, large appraisals are neither efficient nor effective. We need to be prepared to try different approaches and remove processes that don't work. If we don't, we diminish our relevance and fail to meet our potential as L&D professionals.



2 Rath T Strengths Finder 2.0 Gallup (2007)

About the author

Dr Tim Baker is author of The End of the Performance Review (Palgrave Macmillan) and a regular writer for TJ. He can be contacted via


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