A salutary lesson in this article regarding Microsoft who recently announced they were moving away from a stacked-ranking performance appraisal system, akin to ‘Forced Distribution’ as a process. [To listen to this blog post on Audioboo, click here]
The reason for this move is highlighted by Steve Balmer’s comments which points to a goal of fostering greater collaboration within the organisation, thereby encouraging the levels of teamwork and innovation which is essential for their sustained success.
The stacked-ranking system was much criticised over the years by employees who felt it worked against this very ethos, as colleagues had self-preservation in mind as opposed to having the greater interests of the organisation at heart.
A similar example of my own comes from a friend who is a teacher; they told me that after having recently introduced performance-related pay within the school, different behaviours became apparent immediately, most notably people began copying in senior management on more emails as ‘proof’ of their efforts and extra-curricular/discretionary activities fell away rapidly as people started to focus solely on what would help ensure they ‘met their target’.
Some would argue that such focus by individuals on what’s important is a good thing, and to some extent that is true; but when it begins to undermine the necessary collaboration which should be in the very fabric and culture of an organisation, then the pendulum has swung too far one way.
When it comes to putting together a wish-list of a Performance Appraisal solution, one has to step back, take a look at the bigger, systemic picture within an organisation and ask ‘What are we really trying to achieve here?’.
If greater collaboration is one of your answers, then tread carefully around stacked-ranking, forced distribution and performance-related pay.