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Author's profile photo Susan Galer

Employee Performance Management: Separating Fact from Hype

/wp-content/uploads/2015/08/perblog2scn_760965.jpgI’m not a trained neuroscientist, but some of the conclusions about employee performance ratings based on so-called scientific studies seem dangerously misleading. This is the second in a series of blogs offering another perspective on performance management trends and challenges.

Fact: “Brain Science” can be misleading

One of the biggest recent myths is that performance ratings are “bad” because neuroimaging data proves they trigger an employee’s “fight or flight” response and shut down learning. But just because someone’s brain lights up when they’re being evaluated doesn’t mean they’re terrified of being rated and that employers shouldn’t evaluate their performance. Steve Hunt, Vice President of Customer Value at SAP/SuccessFactors, who I’ve spoken with before on this topic, said the bright lights don’t necessarily translate into behavior.

Hunt shared that “there is value in using neuroimaging research to gain insights into theoretical factors underlying employee psychology. But MRI scanning conducted in a lab setting is probably not the best way to study actual employee behavior, particularly when you are seeking to understand high stakes decisions that impact people’s pay and career advancement. It is far more valuable to focus on applied psychological research that uses real performance management data collected in actual work settings that are ideally similar to the ones found in your company.”

In Hunt’s view, performance reviews and ratings are far more complex than people writing sensational headlines would have us believe. “These articles represent a vast over-simplification of what actually happens in the workplace,” he said. “So many of these supposed scientific conclusions have become common wisdom around performance ratings, but that’s not what the actual research says if you dig into it. You can’t just read the headline.”

For an excellent summary of performance ratings misperceptions and erroneous assumptions, read “We Love Ratings” by Marc Effron. Here’s one of my favorite excerpts:

“There’s no science that says that being rated automatically creates a negative response. Highly rated people or those rated consistent with their self-evaluation are likely to have either positive or neutral reactions. Even negative feedback is proven to be more acceptable when the source is credible, and the feedback high quality and delivered in a considerate way. A bad performance conversation may trigger a negative reaction, but that’s independent of whether you use a rating or not.”

Fact: Ratings have an upside

Lost in the negative cacophony around ratings are the positive outcomes. For example, if employees know how they are being evaluated, they also understand what they need to do to be promoted, secure salary increases, and be recognized as valued team members.

“Every person wants to know where they fit into the group so they can grow,” said Leslie Apony, Manager of Customer Value and Adoption at SAP/SuccessFactors. “Research shows that people don’t like not having ratings because they want to know the measurement criteria. Employees gain a sense of career control from knowing how their company makes performance management and promotion decisions.”

Fact: Ratings aren’t going away

Reading even the most sensationalized of the stories carefully, it’s clear companies are not completely discarding ratings. However, companies are replacing the annual, cyclical performance management process with ongoing project-based evaluations.

“Organizations may be moving away from annual performance reviews to a more ongoing rating process that isn’t called a rating process,” said Hunt. “Many of our SuccessFactors customers are generating massive value from performance management processes focused on having continuous dialogues between managers and employees. These trail-blazers are very open about the fact that they rate people. They just do it in a consistent, effective and very transparent manner.” 

Fact: Multiple factors are at play

According to Hunt, one of the challenges of performance management is that it doesn’t operate in a vacuum. “There are so many factors influencing the effectiveness of the performance management process,” said Hunt. “Some employees are more competitive and self- confident than others. You also have manager differences – you can have a great process but if the manager implements it poorly that impacts the situation. Another factor is how the process is communicated. A study on pay-for-performance found very small differences in pay had a significant impact on employee engagement depending on how well employees understood the evaluation process.”

Incredibly, what seems to be missing from much of these conversations is any reference to the actual performance of the employee. Logically, a higher performing employee would likely feel differently about being rated than a low-performer. And, if the low-performing employee is stressed out because of their ratings, that may not be such a bad thing. Hopefully research into this important issue will continue to help organizations pursue truly effective HR transformation.

Follow me @smgaler

Related content:

Hidden Problems behind Eliminating Performance Ratings

Fixing Performance Ratings:  It’s not about what you eliminate, it’s about what you create

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