"Poor management can increase software costs more rapidly than any other factor." (Barry Boehm)

In my previous two posts on Performance without Appraisal, I addressed two of the basic assumptions behind rating, ranking, evaluations, and so-called performance management systems.

Here's the third assumption: Improving individual skills is the best way to improve organizational performance.

Fact:

As we've seen in the first two installments, rating, ranking, and evaluations can damage teamwork, erode trust, and lead to disengagement.

None of those are good for individual or organizational performance.

But it's worse that that.

Kurt Lewin put it this way:

P= f(p,e)

Performance is a function of the person and the environment.

Of course, we need people with the skills and desire to do the jobs they are hired for. Of course, managers need to invest in developing people.

Now, we really really attached to the idea of individual achievement in the US. We love heroic efforts. We tend to attribute too much of both success and failure to individuals (the Fundamental Attribution Error).

Performance appraisals, ratings, and rankings focus solely on the individual. They ignore the environment. When you ignore the environment, you miss the system contribution to performance.

Sadly, the system contribution often does not support productivity and results.

Let me tell you a story from a real company.

Like many companies, they had some problems. They didn't have a clear vision for their main product. Management continued to spin out new product ideas and forced multitasking. Their release process took three months. They substituted tools for real communication. Managers re-formed working teams every few months...but let teams that were floundering continue to flop around. I could go on.

Senior management decided that they needed to do something in order to achieve better business results. So they took decisive management action. They stack ranked everyone (except managers) in the technical organization, and then culled the bottom 10%.

I doubt they noticed that organizational performance did not improve. If they did, I suspect they concluded that they needed to cut another 10% before things would get better. Had the managers addressed even one of the problems with the work system, they could have realized improved productivity and results.

Pfeffer and Sutton (Hard Facts) reference many studies done across several industries--including software--that indicate that even the most talented individual cannot perform competently within a bad system. They call it "The Law of Crappy Systems." If you hire talented people and they fail to produce results it's a sign you have a crappy system.

So managers, we need to start seeing the system and improving the system, so that everyone can do a better job, and the organization sees better results.

You know the final irony? I've talked to several HR professionals who tell me that they have to put appraisal processes in place to force manager to give feedback at least once a year. That is so wrong on so many levels (as I have said many times before).

We can do better.

And in my next post, I'll start telling you how.

Labels: annual reviews, feedback, management

posted by Esther Derby at 3:52:00 PM

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