Don't abuse your employees with performance appraisals

Ever been frustrated with a performance appraisal, either getting or giving one?

Did you know that traditional performance appraisal is based on 100-year-old research by behavioral scientist on dogs, rats and pigeons?

Stop and think for a moment: How do managers come up with the ratings for the performance review? They decide what raise they want the employee to have and then follow the formula HR gives them to justify the raise.

Productivity drops for weeks as managers struggle to prepare and deliver the appraisals. Plus productivity for employees drops for days if not weeks after the feedback is delivered, a lose-lose for everyone except HR, which gets to check off that box for another year.

Let’s look at what we can learn from recent neuroscience.

Using the fMRI, neuroscience has revealed why the feedback that is given is typically rejected by the employee and what can be done to really improve employee performance.

Researchers using fMRI equipment have been able to verify how people’s brains actually react to threats to them or their beliefs and how people justify what they believe and deal with information that is counter to their beliefs.

Here are three areas that impact performance appraisals:

Threat Response – Did you know that the same part of the brain lights up when we are threatened as when we are smacked upside the head?

We tend to react emotionally when faced with threat. We have a need to protect our self-esteem, status and a myriad of other perceptions. The anterior cingulate cortex (ACC) is believed to act as a neural "alarm system" or conflict monitor, detecting when faced with conflict to current beliefs and goals.

In one study, researchers found that being “socially rejected” lit up the same regions of the brain as when inflicted with physical pain.  And when the brain senses a threat, such as negative feedback, it effectively shuts down, impairing memory, critical thinking and problem-solving.

Cognitive Dissonance – People tend to reject feedback that doesn’t fit their beliefs.

We all tend to rationalize and defend our positions at the expense of facts. “Confirmation bias” is the term typically used in the psychological literature to describe the seeking or interpreting of evidence in ways that are partial to existing beliefs, expectations or a hypothesis in hand.

Studies have shown that the reasoning areas of the brain virtually shut down when confronted with negative information that doesn’t fit, and happily lights up to information that does.

“My mind is made up – don’t confuse me with facts” ― but if you have information that supports what I believe, that’s okay.

Blind Spots and Objectivity – We all have blind spots. Recognizing our own areas of incompetence is difficult. Seeing incompetence in others is much easier.

In addition, people tend to believe that our own personal perspective on an issue or person is accurate and enlightened, yet if you disagree, you are the one who is wrong.

Now the easy path would be to admit defeat and dump performance appraisals.

But nature abhors a vacuum. As leaders, we need to establish a new Leadership Moonshot, (akin to sending a man to the moon and back safely by the end of the decade). Not just to stop doing something that doesn’t work, but to change the game with something new.

I’m not, however, advocating that everyone gets a trophy.

Albert Einstein once said, “We cannot solve our problems with the same level of thinking that created them.”

Here are three things that can change the game. They’re not easy.

Create a New Leadership Culture and Mindset – One definition of culture is the accumulated values, actions and behaviors of an organization. To change culture and mindset, change behavior starting at the top. If we dump the old performance appraisal formula, we can focus on both people and results.

All leaders should have regular, at least monthly, personal one-on-one coaching conversations with their direct reports. Where the leader takes time to build a relationship, asking questions about both their employee’s lives and their work, and then listen. This builds trust and opens belief systems to new ideas.

Teach leaders future-focused coaching instead of “gotcha”, threat-focused feedback. Get employees involved, working together to target skills for growth, and have them document their progress.

Change is happening faster and faster. It has been said that: “It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.” In business, learning and adapting is crucial to success.