I just read an article in the August issue of HR Magazine,
published by the Society for Human Resource Management
(SHRM) entitled, "Big-Picture Performance Appraisal" by
Paul Falcone.
Mr. Falcone is apparently a best-selling author and I guess
he's well respected in the human resource field...
...but, I was taken aback by what he was proposing in this
article about how to look at deciding on an individual's
overall rating. He suggests that you go back to the
old-school bell-curve concept.
He argues that each unit in the business should first rate
itself on a 1 to 5 scale, with a 1 representing
significantly under performing, a 3 performing at a 100%
level, and a 5 representing significantly over performing.
Let's say a given unit like sales rates its overall
performance a 4.2, Falcone says that the overall average
total score of all employees in the unit should also equal
4.2. That means if you rate some people over 4.2, you need
to make sure others are rated below that number.
I guess the logic is that these two numbers only make sense
if they are equal. Talk about backing into numbers from the
top down instead of the bottom up. In my mind, this doesn't
reflect the actual performance of the individual.
If you are artificially force-fitting an individual's
scores to match a unit's overall score, how is this fair to
the individual? More importantly, how can management look
at people in the same position across the company and do an
accurate comparative analysis?
Another strange point in this article is that Falcone
suggests every business unit and everyone should be
striving to be rated a 5 overall! If a 3 is considered a
100% performance level, it would seem to me that most
people would be striving to be that "A" employee or "A"
business unit. Sure, it is possible that some employees
sometimes perform above expectations, but rarely should the
performance standards be set so that the employee
consistently exceeds expectations for all performance
measures.
If employees are rated 4's and 5's then they are not being
challenged enough. I coach my clients to set the
performance standards for each performance measure in a way
that asks the employee to stretch even to be rated a 3. If
an employee is consistently rated 4's and 5's, how to they
get challenged to get to their next level?
Falcone also fixates on the overall score as the number to
focus on when filling out the appraisal. Here's another
area where I disagree with his thinking. Best practices
says you look at each performance measure on its own and
score it based on the performance standards for that
measure.
At the end of the process an overall score is calculated
using the weighted scores of each measure. I suggest you
take that one step further...
...instead of showing the overall number on the 1 to 5
scale, you convert it to a %. Why do this?
Well, it's natural for everyone to want to be rated a 5
instead of a 3 since a 3 is half-way down the scale giving
it a connotation of an "average" rating when in fact a 3
represents a 100%, or "A", performer .
If you really want to help your company align your human
capital to maximize your company's performance, set the
right performance measures for each position and for each
person and rate them on each of those measures. Don't back
in to numbers set at the top. That's the only way you are
really going to know how your employees are performing so
you can use those results for organizational development,
succession planning, and other human-capital related
actions.
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Mike is an internationally recognized expert at helping
employers meet their business objectives by teaching them
how to get the right people into the right seat on their
bus. Employers face continuing challenges in hiring,
developing and retaining their best employees. Mike guides
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