Is it Time to Fire Your Performance Appraisal System?

You probably have heard of the Law of Unintended Consequences. A classic example is seen in the early days of forestry management. When the US Forest Service was created in 1905, so much emphasis was put on the suppression of forest fires that biodiversity began to decrease due to fewer young forest habitats, species like lodgepole pine in the Rockies and long leaf pine in the South, both of which require intense heat for germination, became at risk, competition increased the stress on existing trees, and a build-up of debris in the forest's understory made fires more ferocious when they did break out. For three-quarters of a century, the "fix" was actually causing more problems than it solved.

Using old-style employee Performance Appraisal Systems can sometimes be like that. In an attempt to manage personnel more effectively, some workers lose their motivation, while the employees who believe they can do better elsewhere start to leave. If employees view performance appraisals as more office politics, then the unintended consequences of increased dissatisfaction and dropping retention rates are sure to follow.

It is in situations like this that using a PEO can be especially effective. When they act as your Human Resources department, they can conduct appropriate evaluations that minimize the politicking and will not disenfranchise your staff.

If your employee evaluation system still has all the inbred dread of a high school report card, then it is time to update and innovate. Your company's true benefit of an annual performance evaluation is not so much about knowing if an employee is doing what he is supposed to be doing—it should not take an annual evaluation to know that, as it is about learning if you are meeting the leadership and training needs of your employees.

An evaluation ought to be able to identify what management needs to do to improve, not inflict another round of regulation, as happened in the Forest Service. For years, scientific research that recognized fire as essential to ecosystems was ignored because of an ill-fitting congressional policy. Using a PEO can help your company avoid that kind of management mistake.

An annual Performance Appraisal is a check-up to see if the consequences of your management policies are the consequences that you intended. Are you realizing better retention rates and higher levels of employee motivation? Are you managing your office ecosystem to produce a thriving community of employees?

Five Fertilizers for Talent Management

Now that you have hired the best seeds and seedlings in the form of talented personnel, reaping bumper-crop results will depend on many factors. Although you cannot control the storms, or even fully predict the weather in a changing economy, you do have power over the ways you cultivate and fertilize your talent.

Apples + Oranges = Fruit Salad
Many companies regard Development Planning as oranges and Performance Management as apples. Development planning occurs during executive sessions, but employees are graded on their performance in a lonely office. As a consequence, employees often don't have a clear picture of a company's true needs, while the planners have only a fuzzy image of the training activities they need to address. The first round of fertilizer is applied to making the commitment to connect these two areas. They need to grow alongside each other.

The Wisdom of "Know Thyself"
This ancient Greek philosophy can be put to good use in employee self-assessments. Employees are often tougher on themselves than they are on others. Implementing regular self-assessments has three immediate benefits: 1. It gives your employee a voice, 2. It gives managers a fresh perspective, and, 3. It lays the groundwork for useful communication to proceed. They make a good starter fertilizer for growing your talent.

Wisdom in Counsel of Others
Sometimes this goes by the trendy name of "360° Reviews," but whether you call it that or fall back on the old maxim that "Two heads are better than one," there is much to be gained by seeking the counsel of others. Collecting feedback from a variety of sources—customers, peers, subordinates and others, will allow a balanced picture to emerge for your talent management. Establishing a climate of evenhandedness leads to more fruitful talent management results.

Life Beyond the Carrot
Letting your employee see the "beyond" part is crucial in good talent management. Employees are usually given short-term and short-focused goals—the carrot. Giving them a view of the larger-context, higher level, goals lets them see how their work contributes to overall company success. That boosts morale and can become a self-perpetuating stimulus. It also allows creative employees to "bend to the sun" and produce some great ideas; a company's most creative talent often has difficulty with the team-player attitude because they view the world a little differently.

Reward
The old "Wanted" posters offered rewards dead or alive. In business, alive is better, but the lure of reward still stimulates achievement. Most often, rewards come in the form of pay-for-performance bonuses. Being entrusted with a perk like flex-time, having the prestige of a personal parking space, or receiving a simple "lunch is on me" invitation can also be incentives. The important quality that makes rewards work is that your employees perceive them as fair, consistent, and attainable with a little extra effort, lest you inadvertently generate fertilizer burn-out.

Effective talent management must go beyond writing reports and stuffing them into dusty personnel files; it must encourage people and stimulate growth.

The Importance of Intrinsic Motivation

Intrinsic methods of motivation, those that arise from the task itself, are finally getting some of the attention they deserve. In the past, business has relied heavily on external motivators such as a pay bonus, an extra pin on the uniform, or a parking place near the door to help motivate employees. There comes a point, especially in jobs that entail creativity, that an employee will start identifying with that great line from the musical Hello, Dolly! when Dolly Levi tells her would-be beau, "And on those cold winter nights, Horace, you can snuggle up to your cash register. It's a little lumpy, but it rings!" His wooing technique had failed to motivate her.

Dolly stated what every employee learns—that there is more to life, and to a job, than simply a paycheck. Distilled down, the wisdom of recognizing "more to life" has found three new motivational buzz words: autonomy, mastery, and purpose.

Autonomy
Simply stated, this means that people want to have control over their work. Giving people a goal and then giving them the freedom to have some say-so over how they meet the goal can be a terrific motivator.

Mastery
Every normal person wants to be good at what they do. There is more enjoyment in doing something when you can do it well. By using this fundamental human trait as a basis for motivation, work becomes more interesting and productivity increases.

Purpose
Studies in behavioral sciences have shown that people don't mind being a little cog in a bigger machine as long as they know that their cog has significance. A good boss knows how to capitalize on the natural desire to be part of something that is larger than one's self by helping employees know that their work is meaningful.