Q & A: Do Away With Traditional Performance Appraisals

Q: Beyond building performance dashboards, assigning “owners” to particular measures, and so forth, how do you hard-wire performance measurement into key management processes?

A: I asked this question today in the Webinar, “Beyond the Balanced Scorecard, Improving Business Intelligence with Better Metrics,” presented by Mark Graham Brown, a consultant with 25 + years experience and author of three books on performance measurement. Here’s what he said.

Do away with the traditional form of annual employee performance appraisal and replace it with a review of the organization’s performance dashboard. Make sure that performance has consequences for the employee, said Brown. A measure in the “red” should lead to negative consequences like salary decreases, and a measure in the “green,” i.e., a measure trending toward performance targets or goals, should lead to salary increases and promotions.

To make this work, ideally, an organization would need to have a sophisticated performance dashboard – Brown refers to these as “fourth generation dashboards” – that have analytics (indices) that provide a line of sight from strategic to operational measures closely related to the work and responsibilities of the employee, and not just what Brown refers to “singular” measures that are more easily manipulated. Nevertheless, I agree with Brown. I can imagine even less sophisticated performance dashboards being used effectively by skilled supervisors as the main reference in employee performance appraisals. Why should a manager who runs a unit or division that consistently fails to hit performance targets and regularly falls below legitimate benchmarks not be held responsible for those measures?

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