Performance Appraisals
The Horns of a Dilema
Copyright 2004

Since the first human threw his spear at a saber-toothed tiger becoming chief in recognition of his performance (or becoming dinner because he missed) we have been performing performance appraisals. According to Dulewicz (1989), we share "a basic human tendency to make judgments about those one is working with, as well as about oneself." While the consequences of performance appraisals are rarely life-or-death in the working world, they can be severe, and the real potential for damage may be greater than the probability of positive outcomes.

If we inevitably judge, the challenge becomes one of judging in a fair, equitable, and legally defensible manner. Unless our performance review processes are structured and systematic, we have little chance of meeting this challenge.

Performance review system goals may be readily divided into two major camps. In the first camp, the performance review is intended to determine differential compensation between employees with different levels of performance. In the second, performance review is a developmental tool designed to help everyone in the system improve performance over time. Each has advocates, but the general trend of recent years seems to favor the developmental approach, as more evidence has indicated the compensation model contains more negatives than positives.

Considering only the developmental goals of performance review, how do we execute the process while meeting the challenge of "fair, equitable, and defensible?" Methods may be divided into three broad categories; rating scales, essays, and results-based appraisals, with ratings of some type being by far the most popular. The ratings approach can also be defined in terms of who does the ratings: downward (boss rates employee), upward (supervisees rate supervisor), lateral (peer reviews), and 360-degree (employee is rated by members of each of these relationship groups.) While each of these approaches has its own devotees and rationales, only the 360-degree approach has balance.

The field is full of 360-degree instruments, ranging the gamut from hastily prepared, locally specific attempts to fully researched and scientifically validated tools. As with any other employment-related assessment, a business seeking results and defensibility is well advised to carefully investigate the science (validity, reliability) behind the instrument. Once results of the appraisal are available, the real work begins: How to obtain real change in a positive direction, based on the results?

Employee buy-in is an important factor; the more the employee is involved in self-auditing the results, the more buy-in and change is likely. In the best situations, results form the basis for real, meaningful communication.

Finally, if results are widely valued in the organization and systematically analyzed, an efficient training and learning program can be devised around the outcomes leading to real and positive organizational change. A well-designed 360-degree appraisal, properly executed, may be the most useful form of performance review in business today - fair, equitable, defensible, and productive. Consider making 360-degree assessment a part of your organization's developmental process!