How to build a better performance appraisal system
From biology, economics and psychology, we receive the
evidence that improvement is fundamental to survival, and feedback is
fundamental to improvement. It follows that feedback is fundamental to survival.
Without feedback, survival is guesswork. Failure is inevitable.
innovation is the new normal. Whoever fails to adapt will fail at a rate
determined by the depth of their balance sheets and the goodwill of their last
customers. I might have added, 'and by the generosity of their
governments', but post-GFC that strategy is well spent. Gone down the gurgler. The carnage will be epic, but
not all will perish.
Some will survive by committing to improvement.
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 found 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. True, there was serious academic research underway in the early 1990s on the effectiveness of feedback, but the results were still largely unknown to most people. (They still to be 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, 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 and look aback, 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 august Times. The real question is why CEOs feel this way. The theory of feedback as a performance modifier is 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 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? Most of them it seems.
What is my part in this debacle, the castration of science before me? Can I elude all 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 floated the goateed face that's graced a billion buckets of fried chicken: the face of Colonel Harland David 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. Extract from NASA Culture and the Future of Business by 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