By Jeff Fierstein
Quality improvement guru W. Edwards Deming (1986) believed that 85 percent of work performance failure is due to deficiencies in the systems and process rather than with the employee. He said the role of management is to change the process rather than badger individuals to do better. Consequently, managers have some responsibility for work outcomes, as they influence the means and ends of work. As Deming says, “Put a good person in a bad system, and the bad system wins, no contest.” As he suggested, employees have limited control over their performance, but management does!
I wrote an article titled “Appraise the Performance System…Not the Performer,” which describes using an objective “appraisal” system. The system’s analysis tools have long been used for “root” problem identification. The article demonstrates that traditional performance appraisal doesn’t always address the root causes of performance. Read a summary of the article below:
Individuals are a part of a holistic performance ’system’ in which they operate. We can demonstrate this in the following “cause-and-effect” diagram:
The Problem Analysis (Cause and Effect) Model (Adapted from Ishikawa, 1990)
The cause-and-effect analysis examines a 5-factor domain where the root-cause problem may occur. Looking at this cause-and-effect diagram, we can see many possible ’causes’ of performance success or failure.
Applying the cause-and-effect model to performance appraisal shows that the individual performer (people) depends on methods, materials, machines, and measurements to perform their job successfully. All these elements of the cause-and-effect diagram represent a performance system. Appraising a performer without appraising the other parts of the system is like diagnosing a car’s poor performance by checking only the battery – you look at only one part of the system.
Traditional performance appraisal focuses primarily on the individual performer, not the performance system. To use the car analogy, we “appraise” the battery when the real causes of performance deficiency may be an error on the driver’s part or a problem with the onboard computer. Using the cause-and effect diagram, we can demonstrate Deming’s “85/15” principle:
When Only People Are Appraised
The figure above shows that traditional performance appraisal holds the performer 100 percent responsible for the performance and disregards the methods, materials, measurement, and machines. In conventional performance appraisal, we miss many possible causes of performance. However, personal “goals” or “development” activities are precisely what we assign in traditional performance appraisals to improve the performance of workers (as managers sometimes say, “send them for training”).
To “correct” performance appraisals, we must appraise the entire performance system, not just the performer!
Performance system appraisal uses problem analysis methods (like cause-and-effect diagramming) to identify the “root causes” of performance.
By appraising the performance system, we can pinpoint and resolve the root causes, thereby identifying the sources of performance. The “key” to performance system appraisal is gathering the “right” information about how the system achieves its output. This means that all relevant information sources must be included.
Our model for performance system appraisal is the model for cause-and-effect problem analysis. Although this model is used extensively to improve the performance of our work processes and systems, management has had difficulty translating its use to performance appraisal and improvement. Our management paradigm views individual workers as the locus of control over their work. Consequently, they overlook many root causes of performance problems.
To implement a “quick fix,” we revised our performance appraisal systems to conduct “360-degree” appraisals, in which superiors, peers, and subordinates appraise the performer. The fallacy of 360-degree appraisal is that it is irrelevant how many people appraise the performer when the performer themself is only one element in the performance system. No matter how many people appraise, they still must appraise the performance system – not the performer. Consequently, a group of appraisers tells us that the battery (to use our car analogy) is the problem. When we apply performance system appraisal, we no longer “point the finger” at the performers for problem causes beyond their control. Or, as Dr. Deming described, “driving fear out of the workplace.” Now, we can engage the performer (and the rest of the 360-degree team) in a collaborative partnership to identify the root causes of performance.
Such collaboration frees workers to focus their energy and creativity on improving work processes and procedures rather than self-protection and maximizing compensation. It’s time to throw away those “traditional” performance review forms and begin appraising the performance system – not just the performer.
So, where are we now? It’s been 50 years since Total Quality Management popularized performance analysis – over that time, we have applied various forms. However, there has been little application of these models in the workplace. It’s time to update our performance evaluation methods.
With fast-moving change coming to organizations, work will be moving from the individual to networked teams from multiple functional areas of the organization. As noted earlier in this chapter, significant changes are occurring even today in how we design jobs and select and appraise “talent.” The effect on performance measurement and management will be substantial. The manager’s role will shift from the hierarchical controller to a coach to guide their team members to work effectively in networked (cross-functional) teams. An appraisal will require multi-directional information (feedback) to allow the manager to evaluate performance more accurately. Criteria for performance will change. Job requirements will enlarge to include skill sets needed to perform in a lean, agile workplace.
Managers functioning as coaches will enable more consistent, constant, and measurable information to their team members rather than only through annual or quarterly reviews. This will require information flow and connectivity with the network, project teams, and other functional managers. Some companies use shorter-term discussions with their employees rather than formal annual or quarterly reviews. In the previous segment of this chapter, we offered some coaching tips for leaders who need “just-in-time” interventions with members of their respective teams when behavioral or outcome expectations are not being met. Often held weekly, team members can have real-time conversations about the employee’s performance. With the shifting emphasis on future-oriented knowledge and skills, these discussions will also focus on the employee’s development into greater “strategic” positions, adapting to the organization’s culture, and understanding the organization’s vision and strategies. Companies like Zappos (Hsieh, 2010) have used a Holacracy model (Robertson, 2015), where employees create ad-hoc teams to solve problems – without the direction (or involvement) of formal managers.
Business and work are going in a new direction, and our current performance appraisal processes must catch up. In the highest performing, most adaptable enterprises, teams focused on key initiatives, projects, or organizational challenges will provide constructive, objective feedback to each other. This ensures that the knowledge, skills, and abilities needed to successfully support them are continuously enhanced through open, transparent, and honest communication.
Source: Leadership Whack-A-Mole by Ric Shriver and Jeff Fierstein (c) 2024. View at www.leadershipwhackamole.com. To purchase the book, click on the banner below:
Leave your comment about this blog in the Comment section below. If you would like a free copy of the original document Appraise the Performance System…Not the Performer, type “Performer” in the Comment section below, submit your request and we’ll email your copy to you.
