My sister worked for a company that was about to be sold to an investor.  She called me in a panic.  Her performance appraisal was scheduled and she was nervous they were about to fire her right before the sale.  I assured her the request to schedule a performance appraisal was to provide the new buyer with evidence about the performance of the current employees.  I was sure the buyer merely wanted to have some evidence about how effective they were and if they could support the change in ownership.

The next day she called to tell me I was right.  Her original fears were unfounded.  Her performance review was excellent and met all her expectations.  Clearly the seller (my sister’s current employer) wanted to convince the buyer the people were excellent. 

Was that performance appraisal really about her or about the sale?  Most performance appraisals are not really about the people but instead about some other motivation or intended outcome.  This can include things such as a bias, a manipulation, poor leadership, justification for a raise or bonus, justification for a firing, and justification for a promotion or a demotion.   Aren’t performance appraisals supposed to be about improving the performance of the individual?  If so, why would leaders misuse the policy for their own selfish motivations?

The current performance appraisal process really doesn’t work well and there are two basic reasons why:

The basic assumptions behind the current appraisal are flawed
The appraisal process is most often manipulated to justify some motivation other than its original purpose e.g. justifying a raise (or bonus) to keep a high performer happy or justifying the firing of a poor performer.

The main assumption of the current appraisal process is that improving the quality of the people will improve the organizational performance.  This describes our desire to analyze the parts of a whole in order to understand the whole.  This is inconsistent consistent with systems thinking and leaders must embrace systems thinking in order to achieve predictable organization improvement. 

 Most leaders now assume that poor organizational performance is rooted in poor employee performance.  Nearly ninety percent of organizations conduct performance appraisals and that is its main purpose.  This is merely a dysfunctional yet sophisticated form of blame.  Additional assumptions that follow from this are:

Individuals have control over the results of their work and the factors that allow them to achieve their goals.  This is false.  There are always many factors that contribute to the success of a goal.
Managers can evaluate individual performance separate from the contributions of others and the influence of the work tools, environment etc.  This is false.  Managers cannot separate their bias (either positive or negative) from their evaluation.

None of these are true because they are inconsistent with systems thinking.  Instead, the correct assumption is:  “the quality of the interactions between employees (and departments) is more important for improvement of the organization than improving the quality of the people.”  In other words, you can’t separate the evaluation of the person from the quality of the interactions that person has with their co-workers and the working environment.  If this is true one must conclude that the typical appraisal doesn’t evaluate the individual.  It evaluates their interactions.  It is not about the person it’s about the interactions of that person in that particular environment.

 Leaders often manipulate the appraisal process to serve their own purposes.  Just as with my sister, the owner manipulated the process to make all employees “look good” so the new buyer would be impressed.  This compromised the opportunity to receive real feedback for improvement.  It compromised the truth.

 Leaders very often will compromise the process to achieve some short term goal.  The appraisal then becomes more about achieving the goal and less about the person receiving the appraisal.

 That performance appraisal with your name on it is really NOT about you.  It is really about how you are able to interact with others and environmental factors outside of your control.




Wally Hauck is an EMPLOYEE ENGAGEMENT GEEK and a PREDICTABLE PERFORMANCE PUNDIT.  Wally is passionately obsessed with eliminating the current performance appraisal process because it creates long lasting dysfunctions and damage to trust, performance, motivation, engagement, and relationships.In 1983, while reading the book the Turning Point by Frijof Capra, Wally realized he had been taught flawed thinking his entire life.  The world of systems thinking and chaos theory resonated and he made a decision to never go back. From that day forward he vowed to share the insights with anyone and everyone.Wally is a Certified Speaking Professional or CSP. The Certified Speaking Professional (CSP) designation, established in 1980, is the speaking industry’s international measure of professional platform skill.  CSP is conferred throughout the International Federation for Professional Speakers only on those who have earned it by meeting strict criteria. Wally has a Bachelor of Arts degree in Philosophy from the University of Pennsylvania; an MBA in Finance from Iona College; and earned his PhD in Organizational Leadership from Warren National University in 2008. Wally’s new book, The Art of Leading: 3 Principles for Predictable Performance Improvement, provides three basic principles of leadership that form the foundation of success for predictable performance improvement and employee engagement.
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