Commentary by Jeff Neal
Founder of ChiefHRO.com
& Senior Vice President, ICF International

This column was originally published on Jeff Neal’s blog, ChiefHRO.com, and was republished here with permission from the author.

This is the second in a series of posts on performance ratings that I am writing. In the first, I explained how performance rating processes typically begin with the assumption that mid-tier ratings should be the norm — in a five-level system, most of the ratings should be threes.

That assumption runs headlong into the perception of most people that they are above average. So, whether we admit it or not, most of today’s performance rating processes are designed to tell people they are not as good as they think they are.

Today’s subject is the effect that approach has on employees — more specifically, why the way our brains work may mean traditional performance rating processes are unproductive at best and, most likely, destructive.

Research in neuroscience has been going on for decades. As we learn more about our brains and how they operate, we learn how little we really know about its complexities and how little awareness we have of what is happening inside our heads. The brain is constantly making decisions about threats, needs, rewards and how to react, and even things as simple as what we see. If you aren’t convinced our brains do things we are not aware of, check out this little exercise from the Motorcycle Safety Foundation to see what I mean.

For those of you who didn’t click the link, what it shows is a simple exercise in motion-induced blindness. While looking at four dots on a moving background, your brain turns off three of the dots. They never really disappear, but your brain turns them off so you don’t see them. Our brains make decisions like that all day long.

In addition to those types of decisions, our brains also make constant assessments and cause us to react based on our perception of threats, rewards and other factors. There is so much data flowing into our brains that we cannot possibly deal with all of it consciously. The brain’s unconscious networks wield enormous control over our daily lives, even without our knowledge. It is far more than simple instinct — our brains are constantly processing inputs and making decisions.

While we may think self-interest drives a lot of those decisions, one piece I read recently pointed out something I found fascinating. Recent research by neuroscientists may show that humans are not necessarily the selfish creatures many think we are.

That is good news, but our tendency toward prosocial behavior (benefiting others or society in general) may also be related to another tendency most of us have seen repeatedly — a distinct aversion to inequity. We do not like inequity and we react negatively to it in many ways. In fact, our desire for equity can overcome our interest in efficiency. Research by Ming Hsu (University of Illinois at Urbana-Champaign, May 10, 2008, Justice In The Brain: Equity And Efficiency Are Encoded Differently, ScienceDaily) showed subjects were so interested in treating others equitably that they made decisions that were inefficient and could have dire consequences.

In the workplace, countless employee surveys reveal how employees respond to perceptions of inequity. The most recent Office of Personnel Management Federal Employee Viewpoint Survey asked several questions that relate to equity. The findings were dismaying:

Just over a third of employees perceive equity in performance rating and selection decisions. Imagine the level of engagement of the two-thirds who believe performance differences are not recognized, promotions are not based on merit, and poor performers are given a free ride. Their sense of inequity has to have profound impact.

What does that do to rational thought? The parts of our brains that are active when we receive a reward are also active when we see similarly situated people we perceive as lesser performers getting less. It seems schadenfreude is a motivator. The parts of the brain that are active when we are threatened are also active when we perceive those same people being treated better than us. Knowing how many buttons we push with performance appraisals, and how unrealistic self-perceptions are the norm, is there any way to handle performance evaluations that might work? Does the process push so many buttons, seen and unseen, that it cannot be made useful?

I think the answer is that a well-designed appraisal process is possible, but it will require throwing out most assumptions about why we do them and what form they take.

The next post in this series will address why knowing where we are going is a prerequisite for getting there.

Copyright 2013 by Jeff Neal. All rights reserved.

Jeff Neal is founder of the blog, ChiefHRO.com, and a senior vice president for ICF International, where he leads the Organizational Research, Learning and Performance practice. Before coming to ICF, Neal was the chief human capital officer at the Department of Homeland Security and the chief human resources officer at the Defense Logistics Agency.

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