Saturday, February 13, 2021

3. "An Uneasy Look at Performance Appraisal," by Douglas McGregor

Continuing my readings from the Principles of Management course I am participating as part of Houghton's new Certificate in Business Administration.

The second of ten Harvard Business Review articles for the course is a 1957 classic by Douglas McGregor on performance reviews. McGregor is known for the concept of Theory X and Theory Y leaders. Theory X leaders lead by reward and punishment. You do well you get rewarded. You do poorly you get dinged. This fits with the "rational goal" model of management.

Theory Y is a more hands-off approach that assumes people will work better if they find their work fulfilling and are self-motivated. It believes people do not necessarily need supervision to do well if they believe in the mission of the organization. This fits more with the "human relations" model of management. 

1. In 1957, performance appraisal plans had three primary goals:

  • to provide a mechanism for promotion, pay increase, sometimes demotion or termination
  • giving feedback and letting subordinate know where they stand, where they need improvement, etc.
  • "increasingly" a basis for coaching and counseling

Apparently, at that time, superiors did not exactly enjoy this part of managing. McGregor suggests there may be some intuitive wisdom at work here, that the way performance reviews have taken place is lacking. He wonders if "playing God" in this way violates our sense of judging the worth of others. "It reflects an unwillingness to treat human beings like physical objects" (135).

2. McGregor sought a new approach, one that fit with Peter Drucker's sense of management by objectives. The core idea is to let the subordinate determine the performance goals for him or herself. The subordinate does so:

  • after a good deal of thinking about his or her job
  • after making a careful assessment of their own strengths and weaknesses
  • after formulating specific plans to achieve their goals
The job of the superior is then to help connect these personal goals, these targets, to the realities of the organization.

3. The first step is for the employee to formulate a sense of the major features of his or her job. This is not the formal position description but a sense of what the person actually does in practice. This involves a dialog between superior and employee until there is some agreement.

Then the employee sets goals/targets for the next six months, specific actions they plan to take. This should include not only the overarching actions ("reorganize the office") but the detailed steps that are required to get there.

At the end of the six months, the employee evaluates him or herself with factual data. In the interview both go over the self-evaluation and set goals for the next six months.

The superior has veto power at every step of course.

4.  This is a shift from appraisal to analysis. The employee "becomes an active agent, not a passive 'object'" (136).

"One of the main differences of this approach is that it rests on the assumption that the individual knows--or can learn--more than anyone else about his own capabilities, needs, strengths and weaknesses, and goals."

In this approach, the proper role of the superior is to help the subordinate relate his or her career planning to the needs and realities of the organization. In discussion, the superior leads the employee to:

  • increased knowledge and skill
  • contribute to the organizational objectives
  • test their own self-appraisal
"The knowledge and active participation of both superior and subordinate are necessary components of this approach" (137).

The emphasis comes to be on the future rather than the past. It is "constructive." The emphasis is on performance rather than personality. 

5. This approach should result in a different attitude toward performance appraisals on the part of both superior and subordinate. Both gain. "No formal machinery is required" (138).

McGregor leaves it to the "traditional ingenuity of management" to invent the methods for this new approach's implementation. It will take more time than before. But it just might lead to better outcomes.


Jennifer Brien said...

Still playing God, but in a more Godly way?

Ken Schenck said...