On another note, and In response to your article, I’ve decided on a entirely new management system. It is called “Retribution” and works well for both co-worker to co-worker relationships as well as between managers and employees.

Here’s how it works.

You build a retribution system (web interface, all that fancy stuff) where you can go in and buy retribution against a co-worker, your manager or a direct report. You select from the menu, say “Remote reboot computer with skull and crossbones screen overlay, maniacal laughter option” and pay the alloted price (retribution points) and go about your merry way. Soon after, the retribution is delivered upon the other employee without them knowing the source. You can giggle on your own time.

Each employee receives 50 retribution points per month, managers get an additional 10% of their direct report’s points as well so that they can stop with the performance reviews and just fire off a “color their screen pink for a day” or “5 minute anti-nap anoying beeping sound” to get their ‘coaching’ done.

I can’t see a downside to this model and I’m off to patent it now. No stealing.

In my company, which shall remain nameless, I’ve seen some curious stuff done with performance evaluations. Three years ago I was scored a 4.5/5.0 on my evaluation, but due to budget concerns, I could only be granted the raise of a 3.5/5.0. So my evaluation was knocked down a point.

Recently, things have been overhauled so that performance has little or nothing to do with getting a raise. You can really only get a noticeable raise if the company is making insane profits. Otherwise, there’s a standard 1.0% upgrade each year just for having a pulse. Last year, upon getting a flawless review, I was awarded a 1.3% raise. And currently the company is bitching about how high the turnover rate is.

They put out a video recently that showed our VP of Human Resources fielding questions from workers in the field. One woman asked, “If raises aren’t based on merit, why do we bother with performance evaulations anyway?” And for five minutes, the guy dodged the question, while repeatedly praising what a good question it was.

It’s kind of depressing to be treated like a union worker without any of the cushy health benefits or job security.

I took MBA classes at Oakland University, which is less than a mile from the old Chrysler HQ. When we talked about performance evaluations in my HR class, we had about a dozen Chrysler managers and employees in my class.

They had an evaluation system where the manager had to rate all of their employees on a curve. I forgot the exact numbers, but they would have to pick X number of their employees as star performers and they were required to label Y number of employees as poor performers. This caused incredible anguish for the employees and also the managers, especially for the small teams. What if you only had four employees? Which one were you going to pick to get the black mark? What if they all did a good job? Tough. Still have to give someone a black mark.

Not a great system if you adhere to a Deming style look to the system for source of failures philosophy. To what extent is success or failure is due to the employee or due to the system? That should be also be reflected in goal choice. Deming has some great examples of this problem.

I worked for a well run manufacturing company that had a goal setting evaluation process. Every six months, there would be an evaluation where goals were set and the last set of goals were evaluated. I think this works pretty good for manufacturing: improve production, less defects, avoid hot end upsets (don’t ask). It works fine in sales, too: get more customers, increase sales, etc. Very measurable.

However, this is more difficult for support and professional positions. What measurable goals would you set for an accountant? A lawyer? An Engineer? A programmer? Its hard to find good metrics for these types of positions, especially ones so simple and that correlate so directly to company success as production and sales metrics do.

But, then you get what you measure for. My dad has a great story from when he managed a store for a national chain. They wanted to improve credit collections, so they offered a bonus pool where all the stores that made collection goals took a share of the pool. Since few stores made their numbers, the bonus to the stores that did could get very large. So, my Dad took some very creative and drastic (from the parent company’s standpoint) measures to make sure he made those numbers and got the bonus. Because of the structure of the goal and the accounting, his store made huge bonuses for managing what was a relatively small portfolio of credit from the chain perspective. Probably not what they had in mind when they developed the bonus system. Be careful what you measure for. You may get it.

Setting goals and performance evaluation is a hard, but interesting topic.