How Am I Doing? How Good Managers Conduct Appraisals

“The simple act of paying positive attention to people has a great deal to do with productivity”
Conducting appraisals

Mercer’s “What’s Working” US Survey, 2011, asked 2,400 employees about their work, and of the ‘non managers’ interviewed:

  • 44% trusted senior managers to communicate honestly
  • 54% said their department is well managed
  • 53% felt that their managers demonstrated concern for their well being

So one way of looking at this data is to notice that around half the workforce have concerns about how well they are managed, which suggest a ‘problem’ with current skills levels when it comes to managers communicating with their staff. But that begs the question, “in what areas specifically do managers need to improve the way they connect with their people?”

One answer to that question comes from a Corporate Leadership Council study in 2000 (Building the High Performance Workforce.) In the study the CLC assessed 19,000 people: 50% in USA & 25% in both Asia & Europe…

They found 7 factors directly related to improved business performance… three of those factors were…

  1. The Performance Management System (having clear performance standards)
  2. Formal Performance Review (balancing praise and criticism)
  3. Informal Performance Feedback (being fair and accurate)

So the skills of giving ad-hoc feedback and conducting formal appraisal interviews are key components of good management and developing a productive workforce.

A long and winding road

When people work collectively there is a need for some system or process to make sure that employees are working productively, that their goals are clear and aligned and that morale is maintained. Unsurprisingly then, Performance Management has a long history. Murphy, Kevin and Jeanette N. Cleveland (1995) reported that in the third century AD, the Chinese used performance appraisal systems. They were also common in factories during the 18th century in the UK, during the Industrial Revolution. By the 1960’s, boosted by the use of appraisals in the US army during WW2, over 60% of US organizations were running a performance appraisal system.

Little and often

At the risk of stating the blindingly obvious, if a review of how someone is doing is limited to a once a year conversation (when most of the events being discussed are long past) it is likely that the conversation won’t be that productive. The remedy, of course, is simply to talk with people more frequently than that. The ‘key’ to a good performance management system, and a good annual appraisal meeting is: frequent feedback that emphasises recognition for work well done, a focus on priorities, coupled with coaching for improvement (as opposed to criticism.) (CLC 2000) This is why monthly, ‘one to one’ meetings are such an important part of good people management e.g. W. J. Boss, Journal of Applied Behavioural Science 1983, found that employee effectiveness increased significantly when managers held monthly, private meetings with employees.

The death of the appraisals?

Many companies (e.g. Accenture, GE, Adobe) have been reported as moving away from their traditional annual systems in favour of more ‘flexible’ processes. So does this mean the death of the performance review? Not really, the changes (for the most part) simply reflect the best practice of holding regular ‘one to one’ meetings, which should always have been followed.

GE, for example, have taken their long standing EMS system (Employee Management System), which consisted of a formal, once-a-year review, and are now asking managers to hold regular, informal “touchpoint” sessions, where they set or update priorities that are based on customer needs. Development is forward looking and ongoing; manager’s coach rather than critique; suggestions can come from anyone in an employee’s network. However a summary conversation between the employee and manager still takes place at the end of the year, and an ‘overview’ document, which reflects achievements and sets future goals, is still produced. Furthermore, just as they did under the EMS, managers still base compensation, promotion, and development decisions on these inputs (as well as a range of other factors, including business performance, internal and external benchmarks, and budgets.)

Understanding the pitfalls

Both the Annual Performance Appraisal meeting and monthly ‘one to
ones’, can be a conversation that managers and employees dread. And
for sure there are plenty of opportunities for people to feel ‘ill used’
or poorly treated as a result of the annual review process. Disaffection
with the review process can occur due to (i) the design of the appraisal
scheme itself, (ii) corporate culture and (iii) poor interview technique.

Design of the appraisal scheme

Bad scheme design creates a lack of clear goals, insufficient preparation
by the manager, no follows through on agreed actions e.g. not
implementing development plans. The way that pay awards do (or don’t)
relate to an overall appraisal rating can also have a distorting affect on
having a positive, productive conversation.

Corporate culture

In some corporate cultures honest conversations about performance,
or potential opportunities, or how a person can ‘grow’ are discouraged,
and the emphasis is on ‘transactional’ conversations focused solely on the
next task that needs to get done. That this state of affairs exists often
becomes apparent when a manager decides the time has finally come for
a poorly performing employee to go, but a review of their past appraisals
states that they’ve been a consistently good performer!

Poor interview technique

Common issues with the appraisal conversation itself include the
problems of ‘cognitive bias’ identified by the psychologist Edward
Thorndike in the 1920’s; namely the ‘horn’ and ‘halo’ effects. The halo
effect involves people being given a better review than objectively
warranted because of some positive quality they possess, for example,
attractive people are often also considered to be kind, trustworthy and
intelligent. The horn effect, also called the reverse–halo effect, is when
one undesirable trait unfairly affects the rating of other (unconnected)
factors. So (say) a person’s tardiness also leads them to being rated
lower for (say) teamwork or initiative than they really merit.

Good system design

Dealing with poor ‘scheme design’ involves applying sound, research based performance management concepts into the systems e.g. from the CLC study…

  • Ensure employees understand the performance standards
  • Create performance standards that are perceived as fair and linked to organizational success and strategy
  • Provide feedback to employees from multiple sources
    (e.g. 360-degree reviews )

Getting the culture right

As for how to develop a more ‘open’, coaching based culture, that supports effective appraisals, John Kotter (Konosuke Matsushita Professor of Leadership at Harvard) says it’s achieved by… “A powerful person at the top, or a large enough group from anywhere in the organization, deciding the old ways are not working, figuring out a change vision, starting acting differently, and enlisting others to act differently. If the new actions produce better results, if the results are communicated and celebrated, and if they are not killed off by the old culture fighting its rear-guard action, new norms will form and new-shared values will grow.”

Managing the conversation

The remedy for poor quality conversations is to employ a robust interview methodology. The simplest approach (in my opinion) is to apply a version of Harvard Professor David McClelland’s Behavioural Event Interview method (1973) as follows…For each part of the appraisal process we ask the employee…

  1. How do you rate yourself for…(x)…e.g. the way you managed your team?
  2. Give me a specific example of something you did that supports that rating…
  3. Here’s what I think…
  4. Let’s agree what goes on the appraisal form…

The same process is then repeated for each item on the form…. E.g. as you look back over the past 12 months how do you rate yourself for… (initiative).

The key is for the manager to go into the meeting with a genuinely open mind and be prepared to shift his/her opinion in light of what they hear. In this way the employee has the opportunity to take the lead in the conversation, express him or herself fully (point by point) and provide evidence in support of their views, without first being ‘judged’ by the manager. This creates an open, fact based dialogue, which typically leads to a productive and maybe even enjoyable, appraisal meeting.

So what’s next?

Reflect on how you handle your appraisal meetings at present. Do you plan thoroughly? Do you have a set methodology that you apply to manage the face-to-face meeting? What improvements could you make?


Competence Based Performance Reviews, R. Kessler (2008)
(Career Press)


Watch this three-minute video clip talking about four key questions the business can ask team leaders to get a sense of how people are doing.


Consider sending your managers on our half-day, “Successful Appraisal Interviews” course


If you’re a Senior Executive, maybe a ‘one to one’ Executive Coaching Session would be a useful option for helping you improve your approach to Performance Management.  View one-to-one session

And remember……

“I have yet to find a man, however exalted his station, who did not do better work and put forth greater effort under a spirit of approval than under a spirit of criticism.”
Charles Schwab