So we've moved away from moderation in performance appraisal in our organization. Over the years moderation seemed the best though not always perfect way to grade performance of people. It made sense to rank people with relative performance levels. There was a bell curve to be followed forcing supervisors to push people in defined performance bands. However, the most difficult part was to push people in lowest performance bands. It was imperative that we identify the top performers and the worst performers. Not every supervisor was able to rank people in the lowest performance band. And then supervisors used moderation as an excuse. It was easy for them to blame the moderation process. "You are good but I can't help it, moderation forces me to push you in the lowest performance band" was a common excuse. People weren't too happy. Why should a stupid system force one to be in the lowest performance band even when the supervisor believed that the performance was good?
Getting rid of moderation process seems to be a brilliant idea. After all, all I need to compete is with myself. My performance shouldn't be dependent on others. No more bell curve was liberating. Supervisors didn't need to spend endless hours force fitting people into performance bands.
But this liberation didn't come without challenges. Suddenly everyone was either the top performer or the worst performer depending on how the supervisor set goals. Given the difficulty of giving negative feedback, almost everyone ended up being a good performer even though business results showed otherwise.
When you do away with moderation, it is critical that goals need to be measurable and assignable to individual performance. Over time, our goal setting is getting better making performance evaluation more objective. We also need to get better at measurement. Data collection against goals is being improved, evaluation against parameters is being optimized, but challenges remain. Not all goals are easily measurable. Team goals are hard to evaluate against specific individual performances. And then there are circumstances during the year that impact performance against goals that are hard to take into account.
While the process is getting better, I sometimes wonder if moderation in performance appraisal was better. It gave us ability to, well, moderate relative performance. I want the best of both worlds. No matter how objective performance evaluation is, I believe some subjectivity in performance evaluation is imperative to take into account circumstances during the year, to take into account the problems with goal setting that might have been there, to take into account the expectations from the individual that might not have been considered during goal setting for a role. I wonder if it is possible to have some sort of objective subjectivity in performance evaluation?