Manager, Employee Perceptions of Performance Differ

Manager and employee assessments of employee performance rarely match, according to a study conducted by The Beacon Group, an organizational development consultancy. It’s no wonder, then, that most workers want something about their performance appraisal to change, as reported in a separate study.

According to the report released April 7, 2009, by The Beacon Group, over the past five years employees in North America have consistently overrated their abilities.

The study was based on a comparison of more than 10,000 individual employee surveys in which managers in the United States and Canada were asked to rate their employees on traits such as ethics and integrity, customer focus, accountability, teamwork, decision-making, and communication after their employees had completed a self-assessment based on the same traits.

According to the report, managers ranked their employees’ performances lower than employees ranked themselves 50 percent of the time and ranked employees higher than workers ranked themselves 33 percent of the time.

“It’s common for employees to overrate their abilities. … This becomes a more pronounced trend during recessions when individuals attempt to promote their value to the organization,” said Michael Sitayeb, director of product development and marketing for The Beacon Group, in a statement.

Dick Grote, author of Forced Ranking: Making Performance Management Work (Harvard Business School Press, 2005) and several other books on performance management, used to think self-appraisals were a great idea. “But in the last few years, I’ve changed my mind,” he told SHRM Online, because of “the infinite human capacity for self-delusion.

“Research consistently demonstrates that individuals are notoriously inaccurate in assessing their own performance, and the poorer the performer, the higher (and more inaccurate) the self-assessment,” Grote says. “ ‘Know yourself’ may be good philosophical advice, but in assessing how good a job you’ve done, your boss knows better than you do.”

Accuracy is just one problem with self-appraisals, according to Grote. An added problem is the expectation the act of self-appraisal creates. “The act of filling out the form sets up the understandable but erroneous expectation that [the employee] and his boss will then compare and contrast their two assessments [and will use] the appraisal discussion to come to common ground,” he says.

But that’s not the purpose of the performance appraisal. “A performance appraisal is a formal record of a manager’s opinion of the quality of an individual’s work,” Grote says. Therefore, he says, the purpose of the performance appraisal meeting is for the boss to explain his evaluation and provide the rationale behind it.

Grote notes that self-appraisals do work with some employees—those who have “a great deal of maturity, a pretty firm grip on reality, and the ability to stand back and take a dispassionate look at the quality of their own performance.” But there are not a lot of folks like that around, he adds.

Different Perceptions Go Both Ways

The difference between how managers and employees view managers’ performances is even more marked, according to The Beacon Group. Two-thirds of employees rated their managers higher than the managers rated themselves, while less than 8 percent of employees rated managers lower than the manager’s self-assessment.

But these results could be skewed by fear, Sitayeb said: “Even though these surveys are completely confidential, direct reports are sometimes fearful of their managers and inflate their evaluations.”

Employees have no such qualms when it comes to rating peers, however. According to the report, 42 percent of employees rated their peers significantly lower than their peers rated themselves.

Dissatisfaction Exists

Managers, peers and employees agreed that the strongest qualities displayed at work included ethics, integrity, customer focus and delivering results. But there is room for improvement when it comes to leadership, motivation, innovation and performance feedback.

“Ongoing performance feedback and coaching on the job [are things] leaders at many companies struggle with,” Sitayeb said. “It’s easier to provide feedback within a structured performance feedback system with regular reviews. However, employees also expect more frequent coaching in between performance reviews.”

But leaders “struggle with the sensitivity and frequencyof these coaching events,” Sitayeb added.

That’s one reason the majority (78 percent) of employees surveyed in March 2009 by Taleo, a provider of on-demand talent management solutions, expressed dissatisfaction with their performance review process.

“In the current economy, job performance is front and center of the corporate agenda. So it’s not surprising that this is an area where American workers want to seize greater control,” said Alice Snell, vice president of Taleo Research, in a statement. “With employees working hard and performing well to keep their jobs, companies need to not only know what their employees would like to get out of the performance management process, but also ensure they have effective and efficient processes in place to maximize workforce productivity and retain top talent within their organizations.”

One in six (16 percent) of the 881 workers surveyed said they want a review of their performance to be conducted more often. Taleo noted that the bulk of respondents expressing this wish were under the age of 45.

One in five (21 percent) indicated that fairness was the main thing they would change about their performance reviews. Those without a college degree were twice as likely to put a priority on fairness, according to Taleo.

And nearly one-third (31 percent) of respondents want their performance reviews tied to their compensation.

Some employees want to see an even more dramatic change to their performance reviews: Eleven percent of respondents would like their reviews to go away altogether.

But 15 percent of respondents said they wouldn’t change a thing.

Rebecca R. Hastings, SPHR, is an online editor/manager for SHRM.