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What Drove Your Last Performance Evaluation?by Zenger Folkman August 3, 2017

A great deal is being written today about companies changing their performance management programs. Those companies who’ve abandoned traditional performance appraisals have gained notoriety. However, the overwhelming majority are keeping some form of evaluation of performance. We suspect that there are many reasons for that:

  • Employees want to know how they are doing.
  • Organizations need some measure and record in case of discipline or termination.
  • Organizations seek to reward the highest performing employees with greater compensation, and need justification and documentation for that.

The old form of performance appraisal, however, is vanishing. The practice of reducing an individual’s year-long performance to a single digit or word is falling out of favor. Rather than benefitting the recipient, it often does harm.

Are evaluations ever to be trusted?

An article in Harvard Business Review, argued that most performance evaluations are more an expression of the person doing the rating, then of the individual being evaluated. Researchers have identified bias that creeps into evaluations that the article suggests could account for as much as 62% of the evaluation.

They identified three primary sources of rater errors:

  1. The overall leniency of the person doing the rating. Most of us can identify with having a teacher or professor who was a harsh grader versus one who was easy-going and more generous.
  2. The “halo” effect. The overall perceptions about a person tend to color the rating of each of the specific behaviors and traits that describe that person’s performance. It is easy to have the individual scores in any evaluation process influenced by the overall perception.
  3. Positional influence. We have all heard the observation that “where you stand depends on where you sit.” A manager’s ratings are different from a peer’s or an assistant’s, in part because of the different relationship they have with the person being rated.

Researchers pointed out, however, that while the absolute rating from two evaluators may be quite different, the rank order of each specific score about the individual’s capability and behavior obtained from each rater displayed a remarkable similarity. The high and low scores would generally be the same. The behavior of the person being rated is obviously strongly influencing the scores they receive, even though one rater is measuring in centimeters and another is using inches and feet.

What behavior actually drives a person’s evaluation?

Though it is never perfectly accurate, my colleague Joe Folkman and I strongly support the view of the researchers as they explained that the behavior of the individual being rated is the major driving force behind performance evaluation. Any bias in that process can be greatly reduced simply by having multiple raters participate in the individual’s evaluation. In another Harvard Business Review article we shared that if a manager solicits the opinions of three peers and three subordinates, the combined elements of rater bias are now reduced to 24% of the total score. The performance of the person being rated is now more than two thirds (68% to be exact) of the final score. Using more than seven raters would obviously bring that percentage to an even higher level.

We examined our database of more than 7,000 individual contributors and 5,000 managers. Our quest was to find those behaviors that most strongly influenced the final evaluations made. The behaviors that managers associate with high performance were as follows:

  1. Deliver Results. The strongest and most consistent correlations were skills that focused on achieving results. When individuals were able to achieve goals on schedule and did everything possible to achieve results, managers were impressed. Another critical component was the quality of work. The person needed to deliver outputs that met high standards.
  2. Be a Trusted Collaborator. High performance ratings went with being trusted. Being trusted emanates from good interpersonal skills. Strong collaborators were excellent communicators and were held up as role models. Some individuals strive to stand out by working independently. That way it’s clear who deserves the credit. Our data suggests those individuals typically fail. The highest performers, on the other hand, cooperated with other groups and were trusted in making decisions.
  3. Strong Technical/Professional Expertise. For both managers and individual contributors, technical/professional expertise drove their performance evaluation. People devoid of a deep understanding of the technical issues facing the organization work at a significant disadvantage. Some come into an organization with fresh expertise. Yet, by coasting, over time they become obsolete. Technology changes quickly. Keeping up-to-date is critical.
  4. Ability to Translate Vision and Strategy into Meaningful Goals. The best performers understood the organizational strategy and were able to apply that understanding in their job to make a contribution. Those who did not make the effort to connect their work to the company strategy appear to work in a vacuum. Often their decisions were based on personal preferences rather than being aligned with the vision. Understanding the strategy impacted performance ratings for both managers and individual contributors.
  5. Skilled at Marketing their Work. If someone is frustrated or disappointed with their performance rating, they often lament and think: “My works should speak for itself.” Good products are usually successful because they are not only a good product, and they have been marketed well. The fact is, good work rarely speaks for itself. Managers are surrounded by hundreds of shiny objects seeking to grab their attention. Good work needs a little marketing.

When it came to evaluating the performance of managers, there were two additional qualities that rose to the forefront:

  1. Speed. We have been tracking this dimensions for several years. It’s become a critical factor influencing individual success. The world is speeding up. Information is flowing faster, competitors are coming out with new products, global dynamics are changing preferences and the need to move work at a fast pace is a key differentiator between good leaders and great leaders. In our book, Speed: How Leaders Accelerate Successful Execution, we found compelling information that leaders who were speedy were rated two times more effective as leaders, had significantly more engaged employees and were more likely to get promoted.
  2. The Ability to Inspire and Motivate Others. We have rated the effectiveness of this skill on more than 85,000 leaders and found that compared to 15 other leadership competencies, this is rated the lowest. Yet when we asked more than a million respondents which competency is most important, “inspires and motivates” ranks number 1. Fifty years ago, people would work for money, but today people need to be inspired.

In summary, then, while performance evaluations are not dead, they are clearly evolving. The strongest organizations can make the process more effective by using multiple raters to reduce bias. The strongest employees and leaders can make their evaluation better by focusing on the five behaviors that can drive their ratings the most. And for managers, in particular, the ability to execute at a faster pace and the ability to inspire and motivate others can serve as the two extraordinary skills that can propel their rise to the top.

This article was originally published on Forbes.


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