Are Annual Performance Appraisals a Symptom of Dying Organisations?

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The plague emerged in the 1300s in Europe and Asia and within five years killed thirty percent of the population. Organisations today are facing a similar challenge on a rapidly evolving landscape where technology is creating a brave new world on a daily basis. National boundaries are disappearing, as we slide rapidly from traditional capitalism and free markets into an unknown cloud based world of potential totalitarianism and islands of tyranny.

If organisations wish to survive they must find a new way to evolve and grow.

Much has been said about the power of organisational culture. The problem is that everybody has a different idea of what culture means. Here is a definition that I have found to be extremely powerful.

The annual performance appraisal is a fine example of an unconscious repetition of a tradition of the dead. Edwards Deming, perhaps the finest quality guru of the past century called the annual appraisal the greatest insult and humiliation that any manager can impose on an employee. Global research over decades has shown that the annual appraisal has the following impact.

• A negative impact on trust.

• A negative impact on teamwork.

• A negative impact on performance.

• A negative impact on personal energy, creativity and motivation.

• A negative impact on the organisation's ability to adapt, evolve and compete.

In short the annual performance appraisal represents the systemic flea that carries the unconscious plague of self destruction. It's a type of battered wife syndrome.

Why on earth then would otherwise intelligent leaders pursue something so obviously stupid and self-destructive?

George Orwell has something interesting to say about this in his 1984.

We know today that every organisation operates on a half-life scale of just ten years for the simple reason that they do not know how to evolve and survive on a dynamic and competitive landscape. And the real killer is simply an hypnotic trance driven by orthodoxy and the traditions of the dead. Orthodoxy then is the plague that eventually kills organisations. It is absorbed into the cultural DNA where it is carried by leaders in a thousand different and unconscious ways.

Identifying symptoms of the plague in your organisation

• A top down authoritarian and rigid style of leadership

• Bureaucracy, hierarchy and silos

• A fear-based culture

• Little or no sharing of ideas. Low levels of creativity and innovation

• A performance management system that includes the dreaded annual performance appraisal.

If you can identify any or all of the above, your organisation is in serious trouble. It may not be around much longer.

Treatment and cure

Fortunately the treatment and cure is simple and quick to execute. You have two pathways.

• Fire your CEO and the entire management team together with your HR department. Replace with high-energy game changers who have the know-how and courage to evolve a new cultural DNA that rewards obsession and imagination and dispenses with all the existing and low-energy traditions of the dead,

• If you don't like the first pathway make sure your CEO, executive team and HR department initiate the requisite cultural revolution defined above. They can start by eliminating the annual performance appraisal and replacing it with something intelligent, dynamic and effective.

And if you don't see either of these things happening in the near future, find another organisation to work for, before it is too late!