Thursday, December 20, 2012

On Performance Appraisals and Social Learning


Organizations spend billions of dollars each year on formal training programs, yet research shows that people learn how to do their jobs through social learning methods, including learning from others in peer-to-peer networks (Hunter, 2010), self-taught learning by observing others, and learning on the job (Hashim, 2008).  The costs to develop and deliver formal training programs are staggering, costing up to $70,000 per sales person, causing some companies to move to other learning methods (Blair & Sisakhti, 2007).  In spite of the growing body of evidence that suggests people learn most of what they need to know about their jobs through social learning methods, corporations, non-profits, and governments invest most of their budgets in formal learning, when it is apparent that most learning is informal (Cross, 2006).  As a consequence, organizations may be investing resources where they will do the least amount of good.  One way in which people can learn about their performance and how to improve it, is through the performance appraisal process.

Performance appraisals can be a useful learning tool for improving performance.   However, annual performance appraisals are often the type of learning experience that are too little too late;  and when they are tied to merit pay and annual raise processes, can overshadow their intent for people to learn about and improve their performance.  According to a research report by the Journal of Managerial Psychology (2010) evidence shows that the implementation of merit pay programs can suffer from a number of barriers related to the performance assessment and pay allocation that may impede its intended usefulness.  A key management expectation is measuring and managing performance, and perhaps the most used term in everyday life to reflect the progress of this journey and its results, according to Brudan (2010), is performance.  The problem is that performance is often subjective and viewed differently by different managers.

Both the subjective nature of performance appraisals and the use of those appraisals for administrative purposes (such as pay and promotion) can facilitate different forms of bias in performance appraisals which results in inaccurate ratings (Brudan, 2010).  Therein lies the problem that plagues performance evaluations; the bias and inaccurate ratings could be counterproductive to the learning process which should be a main objective of a performance appraisal.  By implementing social performance appraisal technology, employees can turn the performance appraisal into a tool for proactive learning from others that can be turned into actions for improving performance.

The vision for the social performance appraisal initiative is to create an environment in which people can seek feedback in the moment of need from anyone in the organization and use that feedback to adjust behavior as necessary in order to improve performance.  The mission is to empower individuals to seek the feedback they need, when they need it.  Major stakeholders should be directly involved including the chief executive officer (CEO) and the chief people officer (CPO), both of whom must take a personal stake in implementing a new way to help people in the organization learn, grow, and achieve organizational and individual goals.

References:

Blair, D., & Sisakhti, R. (2007). Sales training: What makes it work? T + D, 61(8), 28-33,4. 

Brudan, A. (2010; 2010). Rediscovering performance management: Systems, learning and integration. Measuring Business Excellence, 14(1), 109-109-123. 

Cross, J.  2006.  Informal learning: Rediscovering the natural pathways that inspire innovation and performance.  Pfieffer.  San Francisco, CA.  p.  xiii.

Hashim, J. (2008). Competencies acquisition through self-directed learning among malaysian managers. Journal of Workplace Learning, 20(4), 259-271. doi:10.1108/13665620810871114

Hunter, C. P. (2010). Ways of learning in the pharmaceutical sales industry. Journal of Workplace Learning, 22(7), 451-462. doi:10.1108/13665621011071118

Perceptions of politics and fairness in merit pay. (2010). Journal of Managerial Psychology, 25(3), 229-251. 

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