How to build a better performance appraisal system
The evidence from biology, economics and psychology converges: improvement is
fundamental to survival, and feedback is fundamental to improvement. It follows
that feedback is fundamental to survival. Without feedback, survival is
guesswork and death is inevitable.
innovation is the new normal. Whoever fails to adapt will fail at a rate
determined by the depth of their balance sheet and the goodwill of their last
customers. I might have added, 'and by the largesse of their
governments', but post-GFC, that option is down the drain. The carnage will be
epic, but not all will perish. Some will survive by falling back on the four
billion year old rule found by Darwin, the route of adaptation and improvement,
also known as natural
My name is Archer North. I am the Chief Social Engineer at ANPAS. My roots lie in psychology, statistics and software. After working in human resources, I ventured out alone. I secured clients such as Shell Australia and the Victoria Police. From them, I learned that performance appraisal was an endeavour shot through with fear and loathing. There were many questions and few answers. There was serious academic research underway in the early 1990s on the effectiveness of feedback, but the results were largely unknown to most people. (They still seem mostly unknown even in 2016.) I started a blog about the subject at performance-appraisal.com. There I published a performance appraisal system called the Archer North Performance Appraisal System, or ANPAS for short, in 1998.
I've spent the better part of my life trying to improve performance appraisal. But as I draw near the dag end of my career and look back, I am aghast. Performance appraisal is a horror in many places. Consider this item from the New York Times: "Only one in ten CEOs believe in the effectiveness of performance appraisal." Good grief. One in ten. Don't get me wrong. I'm not doubting the Times. The real question is why so many CEOs feel this way. The theory of feedback as a performance modifier is empirically sound. Feedback is linked to measurable improvements in performance. A meta-analysis of 3,000 studies linked performance appraisal to an average improvement of 0.4 standard deviations. In some cases the benefit was a full sigma - one standard deviation of improvement.1 If we were talking about IQ scores here (and we're not, but allow me to make a comparison) a gain like that is the difference between a classroom of students with a 'B' average and one with an 'A' average, all else being equal. Is there a CEO in the world who would turn their back on this kind of advantage? Yes, most of them it seems.
What is my part in this debacle, the castration of science before me? Can I evade culpability? Hardly. At the least, I have not imparted what Lawrie said, and I believe, that appraisal is "the most crucial aspect of organizational life."2 Surely the subject would have a better reputation if I had. My blog at performance-appraisal.com has had over a million readers, to scant effect. Should I shutdown and shutup? Thus thinking, and wandering in my neighbourhood, I found myself staring at a KFC store. Up high sat the goateed face from a billion buckets of chicken: the face of Colonel Harland Sanders. As it happens, I'm a fan of Sanders. Not because of his calorifically-fortified food, which I can take or leave, but the man himself. Most people don't know that Sanders started KFC when he was 62 years old. I admire his derring-do, taking on the world with his secret herbs and spices, and he himself no spring cock. Therefore I will have another go at demonstrating the immutable fact that feedback is fundamental to improvement. I will fix performance appraisal and put it on the cloud for everyone to use. Archer North, [last update] January 18, 2017
1. Kluger, A.N. & DeNisi, A. (1996) The effects of feedback interventions on performance, Psychological Bulletin, Vol 119, No 2, 254-284
2. Lawrie, J. (1990) Prepare for a performance appraisal, Personnel Journal, Vol 69, April, 132-136