Toward a smarter model of performance management

Donald Trump's weekly pronouncement "You're fired!" makes for blockbuster TV ratings, but as a model for performance evaluation it leaves much to be desired. That's the opinion of W. P. Carey School of Business management professor Robert L. Cardy. His new book, "Performance Management: Concepts, Skills and Exercises," steers managers away from the bellowing/bullying model and toward a cooperative structure in which employees take a more active role. The goal is to make both judges and the judged partners in professional development, for the greater good of the organization.

How am I doing?

Americans are obsessed with the question, whether scrutinizing one's self or — gulp — being rated by someone else. Bookstores burgeon with self-help books, which suggests that our culture is simultaneously maniacal about self-analysis and paranoid about personal deficiencies.

We're so worried about how we measure up that we love to see others on the spot. How else to explain why television is rife with performance contests, from "American Idol" to "The Apprentice"? On "Idol," tens of millions tune in weekly to vote winners up and losers down. Viewers not only vote, they follow gossip about the show in weblogs, magazines and newspapers: Is it a genuine contest or does the show favor some contestants over others? Inquiring minds want to know.

Then there's the fear factor. When Donald Trump bellows, "You're fired" to some would-be minion on "The Apprentice," he's terrifying. But millions of viewers find it thrilling, too: They can't stop watching. Trump may owe the resurgence of his career to his TV role as the ultimate arbiter, his success in the world of entertainment offsetting some tribulations in the world of business. But his style of judging performance probably won't do much to help others succeed, according to Robert L. Cardy, a professor of management in the W. P. Carey School of Business.

"Is this good performance management?" questions Cardy. "What good does it do to say to someone, 'You're fired,' but give them nothing in terms of feedback on their performance? "['The Apprentice'] is entertaining, but it's not a good model of performance management." Cardy has attempted to provide a good model in his eminently readable and clearheaded book, "Performance Management: Concepts, Skills and Exercises," published in 2004 by M.E. Sharpe and now in use in many business school classrooms.

In the book, Cardy grounds his model in lucid explications of current research in the field of performance management. Then he goes a step further, and provides "skill building" exercises so that anyone who evaluates or is evaluated can practice applying the concepts he describes. The goal is to make both judges and the judged partners in professional development, for the greater good of the organization.

There's nothing out there quite like it, Cardy said of his book, and the need for it is glaring. "Surveys show that performance appraisal systems are notorious for being a source of dissatisfaction among employees," Cardy said. Managers may not want to do evaluations to begin with. "They're uncomfortable with it. Some take the position, 'It's all HR, a paper-shuffling task. I'm going to get it off my desk as fast as possible.'"

The managers' managers may be sympathetic, Cardy said: "The attitude is, 'Let's offload or outsource this task and free people to do the line management stuff, the really important stuff.'" The notion of carefully-constructed and sensitively-delivered performance evaluations makes some people think of weak managers and coddled employees, Cardy said. "A lot of managers take the approach of yell a lot [to get results].

There's this romance of the strong leader, who's decisive and focuses on execution," he said. "A lot of the world has gone to looking at outcomes: The attitude is, 'This is what we need. If we have to kick some rear end to get there, then we will.'" For their part, workers may perceive evaluations as inaccurate or unfair, or part of a power play by a control-freak boss, and react with anger or defensiveness. Negative evaluations have been known to result in grievances and lawsuits, work slowdowns or even sabotage and violence, Cardy said.

And even when an evaluation meets the tests of fairness, relevance and accuracy, it doesn't necessarily prompt efforts to improve or excel. In some organizations, teamwork is promoted to maximize performance, yet rewards are all geared to individuals, a disconnect that may undermine the teamwork the company supposedly values.

Then there are situations when "a moderate level of performance may be linked to sufficiently positive outcomes," Cardy dryly observes in the book. (He's talking about the person who reasons, 'Why do more when you can get by on less?') So what's an organization to do to motivate excellence? Given the perils of managing performance, it's not surprising that companies are increasingly turning to computer programs to perform evaluations.

"These programs are commonly used — they really are growing," Cardy said.

"You enter your ratings on various dimensions — quality of work, quantity of work, motivation. Maybe your company has five dimensions everyone is rated on, or the computer program can provide you with generic dimensions. You put in the numbers, out comes this prose, this feedback," Cardy said.

But Cardy doesn't think computer modeling of performance evaluation and feedback is the way to go.

"My opinion of that is how sad, and how ineffective," he said. Performance management is a "messy business", one with no quick fixes, he said. "There's a process, and you have to go through it. It's very complicated. That's why I tried [in the book] to look at it in pieces."

To begin with, there's defining performance: is it behavior, or outcomes. "It's critical to determine what constitutes 'performance' in the workplace," Cardy said. In the "old days," performance might be defined as a fixed set of tasks, he said. That might be too limiting now, when so many companies "have implemented a team approach and the customer-oriented workplace," he said. "Each customer may have a completely different set of demands. Tasks are changing. People may be on multiple teams,' he said. "So you have to look at different ways to describe performance."

"That's why I came up with values-based and roles-based approaches" to developing performance criteria," Cardy said. That's in Chapter 2. Subsequent chapters prescribe exercises to help any employee learn how to:

• Diagnose, or determine the cause of, performance. (Is it the result of a person's ability or motivation, or are there "system causes" such as equipment malfunctions, poor quality of materials, uncooperative co-workers or poor communication from managers.)
• Evaluate performance. (How to develop and maintain common standards, through so-called "Frame of Reference" training.)
• Correct and refine performance by properly giving — and receiving — feedback. (How to focus appraisal on the performance instead of the person, how to evaluate the performance of the person providing the feedback; how to be a coach instead of a judge; how to deal with feedback.)
• Motivate improved performance. (How to improve "system factors", and how to manage motivation through goal setting and the so-called Expectancy Model.)

"What's going on in the organizational world is that a lot of people are evaluators today," Cardy said. "A popular approach is the 360-degree appraisal system" in which evaluation from all directions — supervisor, subordinates and peers — is emphasized, Cardy said. "We need to make sure all our raters have the same standards and apply them equitably, and then to trust them," Cardy said.

A company will also benefit if people reflect often on performance — not just during formal evaluations, Cardy said. "That's another thing I tried to pitch in this book," he said. "Wouldn't it be nice if you could shift from an adversarial relationship [between workers and managers] to a relationship where you're partners — partners in improving performance?

"A lot of people view the top-down, control-oriented leaders as the effective ones," he said. "And that's not necessarily the case."