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Mike Beek's published reply to the article by Paul Falcone that appeared in the August 2007 SHRM HR Magazine:

Odd Approach to Performance Appraisals

I just read an article in the August issue of HR Magazine, published by the Society for Human Resource Management (SHRM) entitled, Big-Picture Performance Appraisal by Paul Falcone.

Mr. Falcone is apparently a best-selling author and I guess he’s well respected in the human resource field…

…but, I was taken aback by what he was proposing in this article about how to look at deciding on an individual’s overall performance rating. He suggests that you go back to the old-school bell-curve concept.

He argues that each unit in the business should first rate itself on a 1 to 5 scale, with a 1 representing significantly under performing, a 3 performing at a 100% level, and a 5 representing significantly over performing. Let’s say a given business unit like Sales rates its overall performance a 4.2, Falcone says that the overall average total score of all employees in the unit should also equal 4.2. That means if you rate some people over 4.2, you need to make sure others are rated below that number.

I guess the logic is that these two numbers only make sense if they are equal. Talk about backing into numbers from the top down instead of the bottom up. In my mind, this doesn’t reflect the actual performance of the individual.

If you are artificially force-fitting an individual’s scores to match a unit’s overall score, how is this fair to the individual? More importantly, how can management look at people in the same position across the company and do an accurate comparative analysis?

Another strange point in this article is that Falcone suggests every business unit and everyone should be striving to be rated a 5 overall! If a 3 is considered a 100% performance level, it would seem to me that most people would be striving to be that “A” employee or “A” business unit. Sure, it is possible that some employees sometimes perform above expectations, but rarely should the performance standards be set so that the employee consistently exceeds expectations for all performance measures.

If employees are rated 4’s and 5’s then they are not being challenged enough. I coach my clients to set the performance standards for each performance measure in a way that asks the employee to stretch even to be rated a 3. If an employee is consistently rated 4’s and 5’s, how do they get challenged to get to their next level?

Falcone also fixates on the overall score as the number to focus on when filling out the appraisal. Here’s another area where I disagree with his thinking. Best practice says that you look at each performance measure on its own and score it based on the performance standards for that measure.

At the end of the process an overall score is calculated using the weighted scores of each measure. I suggest you take that one step further…

…instead of showing the overall number on the 1 to 5 scale, you convert it to a %. Why do this?

Well, it’s natural for everyone to want to be rated a 5 instead of a 3 since a 3 is halfway down the scale giving it a connotation of an “average” rating when in fact a 3 represents a 100%, or “A”, performer.

If you really want to help your company align your human capital to maximize your company’s performance, set the right performance measures for each position and for each person and rate them on each of those measures. Don’t back in to numbers set at the top. That’s the only way you are really going to know how your employees are performing so you can use those results for organizational development, succession planning, and other human-capital related actions.

September 20, 2007

 

 

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