White Paper

Install the Collaboration Plan to Replace the Destructive Annual Performance Review

By Larry Smith

I had been an Organization Effectiveness practitioner for about ten years, observing the angst surrounding the annual ritual of employee performance reviews.

The Wall Street Journal article (11/19/96) titled the “Annual Agony” captured the entire problem and challenge. It was this article that motivated me to search in earnest for a solution.

Thus began the assembly of a file of ideas and insights from various seminars, readings, and speeches. After another ten years, the concept of a Collaboration Plan took shape. It is simple and elegant and has lived up to its promise in a Beta Test that has been ongoing for several years.

There are five books that have contributed importantly to the shape of the Collaboration Plan as presented in this paper (listed in order of importance).

(1) Partnering with Employees by Duke Nielsen
(2) Abolishing Performance Appraisals by Tom Coens & Mary Jenkins
(3) Principle Centered Leadership by Stephen R. Covey
(4) Four Days with Dr. Deming by William J. Latzko & David M. Saunders (5) The Vital Corporation by Garry Jacobs & Robert Macfarlane

The Wall Street Journal, on November 19, 1996, refers to the Performance Review as…

“The Annual Agony”

Then again, another article in the Wall Street Journal, on October 20, 2008, headlined “Get Rid of the Performance Review! It destroys morale, kills teamwork and hurts the bottom line,” is even more critical.

Supervisors are placed in the role of “Judge” or “God” and are untrained for either role.

Subordinates (Direct Reports) liken the experience to sitting with their moms and

dads and hearing where they are lacking and being told, “We know what’s best.”

Research among 200 large companies by Psychological Associates, Inc. concluded that more than 90 percent of appraisal systems are unsuccessful.

If the Wall Street Journal is not your favorite authority, here is what the leading sages say about performance appraisals.

Kelly Allan (consultant and author)

• Filling out a form is inspection, not feedback … History has taught us that relying on inspection is costly, improves nothing for very long, and makes the organization less competitive … anyone who equates delivering feedback with filling out forms has lost the battle for smart appraisal before it’s begun.

Dr. Michael Beer (organization effectiveness consultant)

• Evidence has been accumulating for years that performance appraisal systems, no matter how well designed, do not differentiate employees sufficiently to make valid and reliable compensation, promotion and layoff decisions. They do not necessarily even lead to better coaching. Instead, these systems have become bureaucratic nightmares and have put human resources professionals in the role of “cop.”

Philip Crosby (writer, philosopher, practitioner of quality management)

• The performance review, no matter how well the format is designed, is a one-way street. Someone the individual didn’t select gets to perform a very personal internal examination. There are no certificates on the wall stating the qualifications of the reviewer, yet the effect on the individual’s present and future is as real as if everyone knew what he or she were doing … The reviews, which are supposed to give information to management about employees, do the reverse. The employees quickly realize that management has no way of knowing who is the fairest of them all, except through luck and instinct.

Dr. W. Edwards Deming (father of the Japanese quality movement)

• (The annual review) nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry and politics … It leaves people bitter,

crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. It is unfair, as it ascribes to the people in a group differences that may be caused totally by the system that they work in.

Peter Block (best-selling author on empowerment, stewardship and accountability)

• Appraisals are undertaken in good faith, but there is no escape from their basic nature. Their nature is that the boss takes responsibility for the development of the subordinate and exercises that responsibility through a discussion of strengths and weaknesses of the subordinate. This is the exercise of sovereignty, regardless of how lovingly it is done. It makes no sense to talk of team-and-partnership-oriented cultures, which the marketplace is now demanding, and still holds onto this artifact called performance appraisal.

Why do We Hang onto a Process that Doesn’t Work?

• Most employees (80%) perceive themselves as top-notch performers and believe that an evaluation system will recognize this and reward them with pay increases, career advancement, promotions and other perks.
• Dropping performance appraisals will mean their good efforts will go unnoticed and unrewarded.
• So we (corporate America) continue the practice and promote the illusion that appraisal works and pretend not to notice the harmful side effects.
• I’ve looked at many options and possibilities. The concept of Collaboration Planning provides all of the answers and removes the negatives.

What is a Collaboration Plan?

• It creates a partnership …

“Two parties joining together to create something greater than what they presently have.”

• It is a “Win/Win” understanding, not a “Win/Lose” …
• It is a written set of expectations between a Supervisor and a Direct Report
• It is a means of sharing power … no one loses power … employees become empowered. • It allows Supervisors to become true leaders moving them from a controlling role to

being in control.

• Collaboration Planning will allow you to instigate a highly desirable paradigm shift for your employees. One that will profoundly and positively affect your organization’s growth and productivity. It takes the form of a written understanding between subordinates (here in after called Direct Reports) and their supervisors. The plan’s focus is on achievement of results by the Direct Report with equal emphasis on the supervisor’s provision of resources and support to that Direct Report’s efforts.
• With the successful implementation of the Collaboration Plan, you shift the culture from win-lose to win-win thinking. Today’s mentality is predominantly win-lose. That is, if I win, you lose. Popular in academia, athletics, politics, law, families and peer groups, this mentality is fraught with unhealthy competition and comparisons. Believing that another’s success means your failure, or concluding that if someone else has something, there will be less of that thing for you, creates negative energy.
• The damage is that win-lose contests inhibit participants from discovering the possibility and the value of win-win situations. This is not to suggest that all contests are bad. It is to point out that our human relations programming is overwhelmingly shaped by win-lose situations and that this lopsided programming is a powerful and mostly destructive influence in all of our relationships.
• Collaboration Plans are win-win agreements. Collaboration is the key to empowerment, and power is an essential ingredient in collaborating with employees. Empowering employees does not mean that Supervisors give power away. It means that they share power with employees. Supervisors and their Direct Reports make joint use of power and no one loses power. Empowered employees are not turned loose to do their own thing or to be out of control. By empowering Direct Reports, Supervisors change from controlling to being in control.
• Controlling means manipulating employees’ performances. Being in control means negotiating whenever appropriate, but always being in control of what one agrees to do. In a Collaboration Plan supervisors are always in control of what they agree to allow employees to do. They are always in control of what they agree to provide in the way of employee support. What makes the Collaboration Plan a win-win solution is that empowered employees are also in control of what they agree to do. Win-Win cultures produce a win for all organizational stakeholders.
• The change from controlling to being in control is a paradigm shift that converts supervisors into true leaders.
• The Collaboration Plan addresses head-on the root of job stress and frustration that nearly all stems from a lack of clarity of supervisor’s achievement expectations and insufficient support to accomplish those expectations. Research conducted by Duke Nielsen, President of Performance Systems, Littleton, Colorado is profoundly revealing. The root causes for subordinates not meeting supervisor’s expectations are:

1. Subordinates are unclear about supervisors’ achievement expectations and have insufficient supervisory support to accomplish those expectations. Frequency: 89 percent.

Can you imagine what would happen to productivity at your company if every single employee knew precisely what was expected of him/her?

2. Subordinates have inadequate knowledge or skill to achieve as expected. Frequency: 9.5 percent.

The tons of time and money devoted to the improvement of knowledge and skills have little leverage when compared to “knowing what is expected.”

3. Subordinates are incapable of learning to achieve or physically incapable of achieving as expected. Frequency: 0.5 percent.
4. Subordinates understand supervisors’ expectations but are not committed to accomplishing them. Frequency: 1 percent.

The Collaboration Plan consists of written achievement expectations for the direct report including the criteria for excellence. And it also includes, in writing, what the supervisor will do to support the direct report’s efforts. When they come together to review the plan, the focus is on how the collaboration worked and how they can each improve that collaboration.

• With a Collaboration Plan in place, the performance review becomes an event that both Supervisor and Direct Report look forward to rather than dread. It becomes a review of both.

To summarize:

• The lack of defined and negotiated expectations is a root human relations problem that

has to be solved in most organizations before there is much chance of accomplishing desired individual and organizational achievements.

• A major obstacle to solving this problem is that supervisors and employees usually do

not know how to define and document their expectations.

• The Collaboration Plan is the answer to all objections of appraisals that require one employee to judge the performance of another.

Feel free to contact me with any questions.