Although the performance review is often the single most important work-relevant discussion that a supervisor and employee have during the year, in its traditional form, it fails as a learning tool. Even if the supervisor handles it ideally, asking open-ended questions and checking for agreement, it simply isn't easy for people to learn in a situation permeated by judgment.
Performance management, for the most part, is a carryover from prehistoric times, when hierarchy and control were the watchwords. No wonder it makes people uncomfortable-especially in organizations trying to replace hierarchy with networks and control with commitment.
The managers and staff of Rosemead, California-based Southern California Edison wanted-in fact, needed-to change this dismal scenario. Like many other companies in these turbulent times, SCE has been restructuring and simultaneously attempting to redefine its corporate culture.
Corporate human resources determined that, to support this culture change, the entire performance management process needed a major overhaul. The problem? SCE's new values emphasized empowerment, calling for "challenge, candor and commitment." But employee attitude questionnaires had indicated that the current performance management system was counterproductive in all respects.
In the spirit of empowerment, corporate HR left it up to each operating department to design the performance management system that suited its business strategy best. There were only two stipulations:
- Each system should include a way of encompassing employee and team goals, evaluating individual contributions to strategic priorities and building commitment to corporate values.
- Three milestones should be observed: filing a performance plan at the beginning of the appraisal year, conducting a mid-year review, and producing a final evaluation at year's end.
Before retooling his department's performance management program, Ron Juliff, head of health care and employee services, used interviews and focus groups to collect more in-depth data on the current performance management system. Results confirmed the negative attitude, and helped guide the way to necessary changes. Employee comments included:
- "My manager is removed from my performance. I've got 17 projects I'm working on, and my manager has no idea how I'm doing on them."
- "One month before my review, my manager gives me a list of goals."
- "Basically, everybody gets the same rating, so why all the fuss about this stuff?"
The health care and employee services department reviewed the comments carefully. Rather than feeling daunted by the problems, the department saw them as an opportunity to embody SCE's new spirit of empowerment. The department decided to surpass the company's mandate: Rather than tweak or enhance the old system, it would create a new one from scratch.
A task force guides the way to a new performance management process.
The first step was to call for volunteers to participate in a consultant-facilitated task force. Surprisingly, 40 people of the 335-person department-managers and non-managers from various functions-offered their services, even though everyone in the organization was overwhelmed with work. Did this eagerness indicate a profound dissatisfaction with current performance reviews, or a strong desire to influence the work environment? Both, as it turned out. One volunteer said, "Who better than us to solve our problems with performance management? It's up to us to become fixers rather than finger pointers."
Initially, all the volunteers were involved in determining key problems and defining the parameters for a new system. Then Juliff, working with the consultant and managers, slimmed this rather unwieldy group to 20. To ensure an effective cross-section of the work force, it identified the characteristics of its ideal task force:
- It would be a complete representation of processes, functions and levels in the department
- It would contain more non-supervisors than supervisors
- It would involve people who were not only concerned with the current system but who had ideas for improvement.
The remaining volunteers continued to help on an ad hoc basis.
At first, it was difficult to convince the task force that they were really in charge-that they could start with a blank slate and design a completely new system based on what performance management ought to be. This was the first time they had had an opportunity to influence how they and their colleagues would be assessed. But soon they were working enthusiastically, meeting once a month as a group and also working in subgroups on discrete issues such as format and training.
Along the way, the task force helped ensure buy-in by regularly soliciting supervisors' and employees' opinions. They were, the task force reasoned, the performance management system's final customers. Although it's never easy to make such a big change, the task force pointed out that no one was happy with the current program. It encouraged everyone in the department to provide input regarding the new system's creation. Supervisors and employees were continually asked, "Do you like how the new performance management system is shaping up?" "What do you like about it?" "What would you change?" By asking for direct input, the task force eased the new paradigm in gently and positively.
Assisted by the consultant, who provided process guidance and information on the best systems used by other companies, the task force maintained their enthusiasm during the six months or so it took to implement the new system. Finally, they came to a consensus. What was needed, they concluded, was a process in which:
- Employees as well as supervisors assume responsibility
- Both supervisors and employees learn new skills so that they can work better
- The steps are "doable" for both
- The focus is on values and future growth, not past problems
- Both parties are honest and candid
- The discussion is not a control tool, but rather supports a partnership between employee and supervisor.
"The main objective was to get rid of judgment," says John Stimson, a supervisor and task force member.
To signal the creation of a new way of managing performance, the department wanted to give the process a new name. To reinforce the new system's egalitarian, positive qualities, the task force quickly scrapped the title "performance appraisal" and even dumped "performance management," because both implied that one party does something to or for the other. The title they came up with was Performance Enhancement Process (PEP)-and they meant the performance of the supervisor as well as the employee. Together, the two would need to plan and act with the interests of the business in mind.
Before implementing the PEP, the task force knew it would have to work on departmental communication, which had been its weak link in the past. For the PEP to succeed, sharing thoughts and ideas would have to become a natural part of working together, rather than just an initiative. So the task force upped the communication requirement, adding two discussions to the three prescribed by corporate human resources. This problem addressed, the department was ready to try out its new Performance Enhancement Process.
In the new system, supervisors and employees improve their performance together.
PEP discussions begin with an active examination of the question, "Who are we here to serve?" This is a simple way to clarify the nature and aim of the work. Although the first impulse may be to answer, "Our boss," the true answer has to do with mission, vision, values and customers. Both supervisors and employees need to address this issue-together.
Then, the employee and supervisor collaboratively define objectives that lead to the accomplishment of business strategies by asking questions like, "Where are we going?" and "What will it look like when we get there?" These objectives can be measured with time limits, productivity gauges and/or desired
Once objectives have been collaboratively defined and agreed upon, the employee has an opportunity to suggest the best people to assess how well he or she is doing. These sources of data and measurement may include supervisors, peers, customers, suppliers or colleagues in other departments. This shifts assessment away from supervisors only, to include others who may actually be better sources of information.
The employee and supervisor then decide which of them will do the interviewing, which sources will be interviewed, and what questions will be asked. For example, questions might include:
- Do you feel this objective has been accomplished on time and within budget?
- I have a concern about this problem; how do you feel about it?
- What can we do to improve our service to you? Give me specific examples.
These sources are contacted throughout the year; thus, feedback becomes part of day-to-day work life.
At the follow-up PEP meeting, the supervisor and employee compare notes on the interviews, come up with an assessment, share ideas and define what each person must do to pursue the issues. They focus on opportunities, not judgment, posing such questions as: "How will each of us handle this differently when the situation arises next time? Let's create a scenario."
Also at each milestone during the appraisal year, employee and supervisor clarify that they are still in agreement. This helps make sure they are not surprised at the end of the year. And since priorities may change during the year, the employee won't energetically pursue goals that may no longer be appropriate.
As in any productive partnership, the performer can request help along the way rather than attempting to cover up limitations at the back end-the only written evaluation that goes into the employee's personnel file comes at year's end.
And the health and employee services department continues to fine-tune the program. It's adjusting its rewards and compensation system to further support the PEP-which employees are lauding for giving them more control over their destinies. Says Stimson,"This process makes me feel more accountable to myself and the company. I'm aware that I actually have goals, that they're in sync with company goals, and that I need to be monitoring them, not just doing my job by rote."
Learning new mindsets and habits is rarely easy. But follow-up discussions indicate that both supervisors and employees feel energized by moving from passive recipients to active participants, and by the continuous improvement in candidness that pervades the department. By learning to work together to plan performance, supervisors and employees have eliminated the us-vs.-them feel of traditional performance reviews to become true partners in improving their business.
Personnel Journal, January 1995, Vol. 74, No. 1, pp. 104-108.