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Performance Appraisals - 5 July 2012

At the 1992 Summer Olympics in Barcelona, researchers from Cornell University analysed the facial expressions of athletes who won gold, silver, and bronze medals. They scrutinised footage of ceremonies and television interviews, and found that gold medalists displayed the greatest amount of joy, of course. But here’s the curious thing: the bronze medalists seemed much happier than the silver medalists.

This occurred because of something known as a counterfactual. The silver medalists resorted to an upper counterfactual, which means they judged themselves in comparison to the gold medalists. As a result, they felt somewhat dejected because they would think ‘if only’ thoughts, such as ‘if only I’d tried harder, I would have won the gold’. The bronze medalists, on the other hand, resorted to a downward counterfactual, which means they judged themselves in comparison to those who didn’t win anything. As a result, the bronze medalists felt elated just to be standing on the dais.

Counterfactuals occur in the workplace as well, especially during performance appraisals. A study conducted by the American Society for Human Resources discovered the majority of performance appraisals have a zero impact on performance. One reason for this is that appraisals are often laborious. When both employees and managers dread them, they can’t ever be effective. Another reason can be attributed to counterfactuals.

When you give employees a less than perfect rating – such as B, C, 2, or 3 – it’s possible they’ll start thinking about what could have been. It’s no big deal if they resort to a downward counterfactual, because the result is simply a bunch of happy workers. But if any of them fall into the upper counterfactual category, you might have to deal with emotional reactions such as anger, resentment, tears, and grief.

Here’s how to minimise upper counterfactuals before an appraisal:

- No surprises: Hold enough feedback sessions in the months leading up to the appraisal so that employees can predict precisely what they’ll hear from you.

- Be clear: Ensure employees totally understand how their performance will be measured. It is terribly unfair to enforce an unpredictable bell curve rating system.

- Ask questions: Have honest conversations that explore what employees are expecting. With this information, you’re able to correct perceptions in advance.

And here’s how to deal with upper counterfactuals when they occur in an appraisal:

- Don’t argue or debate. Remain calm and allow the employee to vent.
- Paraphrase what the employee has said to demonstrate you’ve listened.
- Ask further questions to help raise awareness of the underlying causes.
- Refer to previous discussions at which the underperformance was made clear.
- Be prepared to concede that maybe – just maybe – the rating was wrong.

Performance appraisals have the potential to make a real difference. If they’re delivered in the right way, employees won’t need to come first to feel like a winner.

 

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