From Top to Bottom: Reimagining Performance Appraisals
In my last blog article on "Rewiring your hiring process," I advocated that the hiring manager write a self-appraisal document for their new hires to validate whether they need a new hire in the first place and decide how their success would look.
After sleeping on this notion for a few days, I thought: Why limit this self-appraisal writeup on one's behalf to hiring alone? Why not extend it to the entire organization and foster a win-win relationship with its employees?
The performance appraisal process in most organizations requires revamping for the better. It always creates a waiting for exam results feeling and mostly ends as a disappointment for most employees.
Let's dive deep into this new collaborative approach to appraisals in software development organizations, which could solve some of the shortcomings in the current system.
Beginning with the end in mind
The CEO should start by writing a press release to be published a year from now. This press release should cover all the areas of their organization - Engineering and Product Management, Research & Development, Sales, and Marketing & Finance, etc. The writing should address how they wanted to be known after a year in each department.
Then, they have to think about using this press release as the goal and write the self-appraisal document for all of their direct reports on their behalf. This document should be written from the "Direct Report's" perspective on what they did to achieve the things mentioned in the press release.
The CEO has to ensure that all these documents of their "Direct Reports" are cohesive and in alignment with the press release they have written. After verifying this, they have to share this with the respective folks.
To the "Direct Reports," this document will serve as the guiding line for the rest of the performance appraisal period to measure where they stand and what they must do.
In turn, these "Direct Reports" will have to write the self-appraisal document for those reporting to them. They have to write it precisely so that when all their reporters do their job well as per this written self-appraisal document, they can achieve the goals mentioned in their self-appraisal document.
These reporters, in turn, will be repeating the same, and this process cascades to the last levels of an organization.
What does this new approach address?
What does every employee want to know from their boss (or manager)?
- Clarity on what they have to do.
- Clear expectations on how their boss (or manager) will evaluate them.
If an individual knows these two things at the beginning of a performance appraisal period, that will do a world of good for them! Every day, they wake up with clear goals on what they have to do to get what they want.
It will foster a great environment and an organizational culture where everyone knows what to do.
What if everybody performs well?
Isn't it a good problem to have?
Given that all the team members have clarity on what is expected, most of them would perform well in this new approach.
However, some organizations follow specific statistical models to develop certain tiers (or bucket systems) on how to rate the individuals to give the salary rise and promotions.
This statistical approach creates a hostile team environment due to the unfair treatment among the team members. There were instances where only one got the highest pay rise even though one more person in the same team was equally deserved and became a victim of the statistical model.
I understand that this statistical model has an impact on the financial numbers of an organization. But taking this route significantly impacts the morale of the people. So, the organization's leadership has to take a call on striking a balance without compromising human values.
What about OKRs?
This new approach may look similar to OKRs but has one significant difference.
It puts the people first!
By writing the self-appraisal document for the person reporting to you, you put them first and think in their shoes. That's what every employee wants from their boss 😃
If we use this new approach well, it complements the OKRs, and in some cases, it can potentially replace them.
What if the priorities change?
The world is not static. There will be changes in the market, environment, rules, and regulations. A single invention may disrupt the industry and dent an organization's growth in certain situations.
When things change, the CEO has to revisit and rewrite their press release and their direct report's self-appraisal documents, which reflect the change in priorities. Subsequently, these direct reports change the self-appraisal documents of their reports, and it cascades.
During the final appraisal evaluation process, these changes should considered into the account. Everyone should fairly conduct their report's evaluation.
To minimize the number of changes, we can reduce the appraisal period to half-yearly or quarterly and carry out these writing exercises only for these periods.
Will it work?
All it requires is to consider the employees as part of the equation and treat them as key stakeholders 😃.