There are plenty of aims of appraisal or performance review programmes, but the key one is usually for managers to assess the performance of their staff, often giving them performance assessment ratings. Sounds like a straightforward enough concept – yet like so many HR initiatives, it is so often a good idea badly executed! The main problem I come across is managers who are far too soft on their staff, giving them inflated assessment ratings. Like a too-nice teacher, or the proud parents who are convinced their progeny are prodigies (not least because it reflects better on them), they seem to think that the absence of problems equates to excellence. But the delusion that the sun shines out of staff bottoms can be bad for business…

Setting the bar too low limits effectiveness. If people are constantly exceeding their objectives, this suggests that the objectives just aren’t stretching enough – so where’s the challenge, or the opportunity to really fulfil potential? So, consider the logic. If all your staff are doing brilliantly, then it stands to reason that the organisation should be doing brilliantly – since the whole should be more than the sum of its parts. But if you’re not seeing the same success at organisational level, you need to rethink your objectives and required performance standards at department and individual level.

Also, is there consistency across the organisation? If two employees with different line managers have much the same level of performance, but one clearly has a far more positive assessment than the other, eventually this will be noticed! It will be perceived (rightly) as unfair, and could become divisive, as well as reflecting badly on the managers involved (since one must be in the wrong!) So make sure that there are clear guidelines and training for managers on what constitutes poor, good or excellent performance. Competency frameworks, clear expectations and collaboration between managers when setting standards can all be helpful here.

To give more clarity to the process, get rid of ambiguous ratings or levels such as A/B/C/D (too school-like!), 1/2/3/4 etc. One manager’s C could be another manager’s B! Instead, make them do what they say on the tin. So for example, have ratings such as Below Requirements, Meets Requirements, Exceeds Requirements and Consistently Exceeds Requirements. This takes out the subjective element, as long as what is required is well defined.

It also makes the point that just because someone isn’t performing badly, doesn’t mean they are performing excellently. There is no shame in meeting requirements – some people happily bloom where they are planted rather than being star performers, and that’s fine! Otherwise the top rungs of the career ladder would be very crowded… Generally, if you have more than 40% of your staff regularly exceeding required performance standards, you probably need to look again at where the bar is set (and look again at paragraph 2!)

Some managers just don’t like to deliver difficult messages, so to avoid any conflict, they would rather keep the peace and a quiet life by telling people what they want to hear. I find this is particularly common in non-profit organisations, and especially if performance–related pay is an issue! One company I worked with discovered that managers routinely gave inflated performance ratings for their staff to ensure that they got above-average salary increases. When challenged though, every manager insisted that although this was common practice, they were in fact the only manager whose team was genuinely worth it… Yeah, right.

Ultimately, unless performance assessment is an honest, objective and valid process, poor performance isn’t addressed, people begin to coast, and business success slowly but surely begins to decrease. A bit like a frog in boiling water, you probably won’t notice until it becomes critical! So have a good look at your performance appraisal and review procedures, do some critical analysis of the results across the organisation, and see whether your managers are too soft by far!