A recent report from Quartz outlines the reasons why General Electric dumped its notorious “rank and yank” performance appraisal process. The bottom line is they decided the rigid rating process was bad for business. GE is not the first large business to stop doing traditional appraisals. Adobe replaced their annual process with a more informal feedback-based process and many others are doing the same thing.
With businesses learning that traditional performance appraisal processes are bad for business, it is time to admit they are bad for government too. Virtually no one thinks they are worth the time, money and hard feelings they create. In fact, if we did not have such processes, anyone who proposed spending hundreds of millions of dollars every year to create a process that everyone hates (and almost everyone agrees adds no value) would be laughed out of the room.
Supporters of traditional appraisals argue they improve performance by encouraging people to work harder and smarter to get better ratings (and bigger bonuses). Some HR and legal folks will say we need the multi-level appraisal process to support firing poor performers. Both reasons are baloney.
High performers are not motivated by a once-a-year process where their boss tells them they are “highly successful” or “exceptional” or, God forbid, “fully successful.” Good leaders motivate people, interesting work motivates people, and an intrinsic sense of self-worth and pride in work motivates people. Performance ratings demotivate people. If we are interested in seeing more and better efforts from government workers, we should drop the annual review and replace it with something that ensures continuous feedback.
Even if we could make a case that people are motivated by bonuses, the bonuses available to most non-SES Federal employees are certainly not enough to motivate more and better effort. Bonuses are often just a few hundred dollars. Do we really think a workforce with an average annual salary of $80,000 is going to be motivated to work longer, put in more effort, and be stronger contributors for a few dollars? It just is not going to happen. Even if it did, we do not need traditional reviews to give people bonuses. When managers see great work happening that is above and beyond the call of duty, they should recognize the employee. What they should not do is wait until the end of a rating year, then give someone an award for doing their job.
The people who want more government employees to be fired may argue that performance appraisals are necessary to make that goal a reality. The truth is that it has the opposite effect. Rather than dealing with the small number of poor performers, managers have to go through a miserable and time-consuming process for everyone. If they were not writing appraisals and filling out forms for the 90% or more who are doing good work, they could focus more time on those who are not. That seems like a good trade to me.
The current appraisal process could be replaced with an exception based approach where employees get a formal rating when they are not performing and a bonus for truly exceptional work. That would eliminate the bureaucratic parts of the feedback process and recognize that most employees are doing their jobs. Some maybe a bit better than others, some a bit worse. But most employees are in a broad range of “OK” and they do not need the annual process to keep doing their jobs. We could implement processes that ensure managers provide timely and regular feedback to employees, and we could help managers learn how to provide feedback. We could help employees understand what is expected of them, their organization, and their immediate team, so they know what they need to do.
If killing traditional appraisals is good enough for some of the biggest and best businesses in the country, it is good enough for the Federal government.