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Many managers struggle with the concept of performance appraisals, so in an attempt to solve their concerns, they create a system that puts people in order from the “best” to the “worst”.

There are lots of creative ways of doing this ranking. They can simply put people on a list and write down a number next to their name. They can compare two people at a time, to work out if Mary is better than Sue, and then if Mary is better than Ben, and then if Mary is better than John. They can even get a few managers to rank individuals in their order of performance, and then take an average of their marks.

The problem with all ranking approaches is they are fundamentally flawed. No two people have 100% identical jobs. Each person generally has different roles, responsibilities, and accountabilities that create variation in their performance.

Another challenge is that ranking does not show how much better or worse one person is from another. The differences may only be miniscule, but they can have major effects on morale.

Ranking also doesn’t take into account the actual results achieved. All of your team may be poor performers and not delivering, yet if you rank them they perceive that the top of the list are high performers worthy of promotion.

When you put someone in a rank order, you generally don’t have an in-depth discussion with them about what is working and what needs improvement. You simply boil everything down to a number, which tends to close off the discussion.

Finally, rater bias is alive and well with rankings. Rankings tend to be made on the basis more of personality and less on performance.

So, if you want to build the performance of your team, bin the ranking approach and head back towards an open and honest performance appraisal discussion. You will get much more effective results from your performance appraisals.

If you are not sure how to hold effective performance appraisals with your team, our Employee Performance Review Kit includes information and training to help you create effective performance reviews.

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