Trend Watch: Fairness and Performance Appraisal

There has been a lot of discussion in the HR blog world of late regarding the subject of performance appraisal. More and more people are dismissing the importance of the performance appraisal process. There are a number of arguments that have been used, most of which I have always said have more to do with the user than it does with the tool. But now I am not so sure. I am beginning to think it may have as much to do with a changing view of the concept of “fairness” in our society. So I wanted to get you thinking along those lines as the trend develops and people apply a new definition of “fairness” to the performance appraisal process.
What got me thinking along these lines was a very interesting opinion piece by Arthur C. Brooks, published in the Wall Street Journal. In Fairness and the ‘Occupy’ movement, Brooks discusses the two sides of the movement. He writes:

 “…they are not so wrong in indicting our system today for unfairness, and for being wracked with crony capitalism, insider dealings and corruption. What is a fair economic system? Some define it in terms of forced income redistribution. The overwhelming majority of Americans, however, believe fairness means rewarding merit, even if that means some people have a lot more than others.”

He then gives the example:

“Imagine two secretaries, of the same age, doing practically the same job. One finds out that the other earns considerably more than she does. The better paid secretary, however, is quicker, more efficient and more reliable at her job.” When asked if it was fair that one secretary be paid more than the other, 88.6% of respondents answered that it was fair indeed.”

From this he says:

According to the meritocratic definition of fairness, we have been getting less fair as a nation with every new redistributive policy and regulation that unnecessarily hinders entrepreneurship. Greater fairness means rewarding hard work and innovation—not handing out stimulus cash to politically well-connected corporations and campaign donors.

In a response to Mr. Brooks’ essay Terry Peters of Richmond, Virginia wrote a letter entitled Future Will Be Shaped by Our Definition of ‘Fairness’, in which he makes the comment “But many now believe that rewards are disconnected from work effort and value-added. Democrats have for decades worked to erode faith in the American meritocracy, exploiting resentments and envy for political advantage. The media and academia generally stoke that sense of systemic unfairness.”
After reading this I reflected on the decline of “meritocracy” in our society and hence our business system. Today we don’t reward merit as much as we perhaps have done in the past. We are bringing up children to not distinguish themselves. In ball games there are no “winners.” Teachers are not allowed to mark papers using the color red. Everyone gets a certificate or trophy. I am sure you can probably think of some example as well. So is there any surprise when we ask a young person today what “fair” is that they respond that “everyone gets something” aka “wealth distribution’? So combine that with a misuse of the tool of performance appraisal and a changing emphasis from “individual” to “team” that many companies now have you can more easily see why there are so many calls to get rid of performance appraisal.
Of course what does that lead to? You emphasize results! And we have seen that in the development of “Results Only Work Environments” or ROWE. The problem with this is all of us know that people do not work with equal effort. So where does “fairness” come into play as we distribute the rewards for accomplishment? Or do we forego rewards all together?
Anyway I wanted to get you thinking along these lines since it is going to be a developing concern for HR departments and businesses as we get the generational shifts occurring in our workforces. Help me develop my thinking on this subject. What else should I be considering? I do come from the “meritocracy” school of thought so let me know if or how I need to be changing.

1 thought on “Trend Watch: Fairness and Performance Appraisal”

  1. Michael, it was interesting to see your blog today because I have never had a job review at the company I am with (3 years now.) They give token pay raises each year despite your performance level and it seems quite unfair!!
    Here is the letter I wrote about a week ago and sent to my district and regional managers.
    Dear Charles,
    I’ve recently reached my third year anniversary with Fresh and Easy. During that time I’ve taken on several important roles in our store here in Newbury Park. I am the main Cash Office customer assistant, do Monday ROTA, handle most of the donations that F&E so generously grants to organizations in our community and have held the title of Shop for Schools Champion for three sessions.
    As the head of the cash office at 1077 the company has relied on me to share my knowledge with others, teaching managers, MIT’s, TL’s, and fellow CA’s how to run a successful cash office.  I am always available to trouble-shoot problems that arise at any of the stores and take calls often.  At the end of my cash office duties I shift gears and head out to throw the load and face anything the day has to offer. I thrive on new and challenging projects.
    I am the eyes and ears of our store and a valuable member of our team. As one of the original employees of 1077 I have developed a skill set like no other, nurtured by experience and am able to assist the managers in ways that other CA’s cannot.  I am a reliable, innovative, hard working, multi-tasker who goes home at the end of the shift knowing I’ve given it my all and yet thinking about what needs to be accomplished the next day.
    Due to family obligations I cannot work nights and therefore would not qualify to enter the Options program.  It has recently come to my attention that despite the fact that I continue to grow and become a more valuable employee I will not receive another raise without taking on the title of Team Lead.  How can it be that a company that spends so much time and effort producing quality products for it’s shoppers would not also believe that the quality of the employees representing their company would be of equal importance?
    There are signs that our skills and performance are important as we are judged by Secret Shoppers, Loss Prevention and various audits but are never reviewed and rewarded on a personal level. If someone else doesn’t smile, isn’t helpful, forgets their name badge, we are all responsible as a group. And yet, if one of us goes the extra mile we are all congratulated.
    Please consider one of the lines that is printed on my I Love Fresh and Easy t-shirt, “Because I am encouraged to be an individual.” Sometimes that statement is hard to identify with. My manager treats me like an individual on a daily basis but it never shows on my paycheck.  Wouldn’t it benefit the company to reward their employees on merit, for a job well done? Every chain has its weakest and strongest links. What is the motivation to work harder when you know that a lazy employee will reap the same rewards?  How about showing the weaker employee that there can be benefits to stepping up their game? Why should we all be paid like we are the weakest link?
    After three years of dedicated, quality service to Fresh and Easy I find it hard to believe that I am only worth $.90 an hour more than the inexperienced new hire that will walk in off the street next week and put his name badge on for the first time. He may prove to be a reliable hard working part of the team or an inconsiderate slouch.  But, for now it doesn’t really matter because if he can hang in there for a year he’ll get a .40 raise, no matter what. Something needs to change. Each store manager needs to be able to build a strong team of dedicated employees rather than left babysitting those who don’t cut it. Give them the tools to succeed by allowing them to have a say in the value each employee carries within their own store.
    I have enjoyed growing with this young company and seeing the progress they’ve made in the last three years.  The company will continue to expand and succeed if they can nurture a healthy crop of enthusiastic, dedicated employees to represent their products and ideals. With some simple changes in the way that pay rates are assigned to show that we can be appreciated as individuals I would be proud to be able to tell my friends, family members and my community that Fresh and Easy is A Great Place to Work.  
    Judy P
    F and E
    Newbury Park, 1077
    Hope this sheds some light on your topic from an employee’s perspective.

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