Oh My God! They Killed the Performance Appraisal!

Move over Kenny of South Park. The humble performance appraisal is being killed off more frequently than you ever imagined. At least, that’s what some pundits and bloggers would have us believe.

One recent example—a post on the HRbartender blog, “Here’s What Happens When You Kill the Performance Appraisal.” Despite its misleading headline, the post actually explains how the popular restaurant chain, Texas Roadhouse, transformed its performance review process. Repeat—transformed its performance review process. Not killed.

Texas Roadhouse calls its new performance appraisal process GPS, which stands for Growth, Plan and Support. The purpose of the new process, according to the HRbartender post, “is to be forward-looking instead of backward.” Performance appraisals now take place 30 days before or after an employee’s anniversary date and they focus on three issues: 1) Career opportunities employees would like in the future. 2) How they will prepare for those future opportunities. 3) The resources they need to be successful. Texas Roadhouse also de-coupled the review process from merit increases.

We have one word for Texas Roadhouse: bravo! This is a company that understands one of the fundamental precepts of performance appraisals—that they must be done in a way that best fits their corporate culture.

One of the things we like most about the company’s approach is that it put together a team of managers to develop the new process rather than simply following the lead of an executive or HR director. Involving employees (in this case, managers) in major decisions and organizational change of this kind helps create better, more meaningful results—and it does wonders for engagement levels.

For Texas Roadhouse, it also helped them better address employee development, which is one of the main objectives of any performance appraisal process worth its salt. Clearly, Texas Roadhouse understands the importance of truly sound performance management and how appraisals and employee development are tied to it. Their new appraisal process isn’t the only way to accomplish this but it’s one way to do it, and it’s obviously better suited to its organization’s culture.

Yes, forward-looking performance appraisals like those instituted by Texas Roadhouse are an invaluable component of excellent performance management. But for many employers, a “review” component (in which a manager summarizes what was good and not-so-good about an employee’s performance over the last several months) is equally valuable. Similarly, separating reviews from merit increases makes sense for some employers but not for others. It’s about doing what’s right in the context of your culture.

Once again, bravo to Texas Roadhouse. But we have to give the sensationalistic headline writers at HRbartender a “thumbs down.” They got the story wrong. Like Texas Roadhouse, most employers are not killing performance reviews. They’re transforming them. That’s the real story.