The team appraisal trend

We’ve interviewed Peter Cappelli, Professor of Management and Director of the Center for Human Resources at the Wharton School of the University of Pennsylvania.

Peter is a regular author and contributor to Harvard Business Review.

Why do you believe we are witnessing a shift away from traditional forms of team appraisals toward newer methods that often have less focus on the individual and a more team centered approach? 

Peter: We’ve seen a bulk of survey evidence suggesting that about 30 per cent or so of companies were heading in that direction including many quite prominent ones.  The reason is that many of the traditional forms of appraisal centred around the individual are universally loathed as ineffective.
 
How do team appraisals benefit both the performance of the individual and the organization? 

Peter: The reason so many people seem to have trouble understanding why focusing on individual performance is not the obvious answer, is because they aren’t thinking about real teams. They’re thinking about “teams” as just a name for a group of people – “I have four people on my team” when they are all individual contributors. Think instead about the military and a group of soldiers going into a battle.  Do you want them focused on their individual success? If you did, their individual goal might be to just not get shot. Or think about a design team trying to build something new: do you want the individual members each just advocating for their own design or trying to perfect some common outcome.
 
Why is the frequency at which feedback delivered significant to organisations?  

Peter: Frequency is important because we know the sooner you get it, the sooner you can fix the problem. The longer you wait, the harder it is to remember what happened or do something about it. Here the question should be: Are we giving feedback to try to improve performance, or is this a score to hold people accountable?
 
Forced ranking and other forms of individual feedback approaches, such as Ray Dalio’s Radical Transparency, have delivered success for organizations. Is this not evidence that an individual approach can be effective? 

Peter: We have no evidence that those approaches delivered value.  We did see that GE abandoned them soon after Jack Welch left as he believed in them.  The idea that simply because a company succeeds, everything they do must have been right is obviously not true.  We can see in careful studies how tactics like forced rankings affect individual behavior, and it reveals the obvious point that they make individuals competitive more with each other. That may be fine if it’s individual contributors. It’s an obvious mistake if you are trying to get the team as a team to do something.
 
In the past you’ve cited Adobe, Deloitte, and Accenture as examples of organizations pursuing a reformed appraisal system. How have these changes benefitted these companies?  

Peter: The first thing virtually all companies found is that employees and managers were delighted to stop doing the old system. The issue then is what comes next. Does the leadership care enough about it to get supervisors to start talking to employees? In some places – consulting firms – they do because they understand that getting subordinates to improve makes them more valuable in obvious ways.  They can charge more for their time. In others, it seems to me that they are not doing anything. It’s a problem of organizational change.

Incidentally, Deloitte has subsequently walked back their approach. They found that partners like to fill out forms, so they now do a simpler, four per year appraisal.