06/02/2014 04:36 pm ET Updated Jul 28, 2014

Stop Assigning Numbers to People!

Performance appraisals may finally be a human resource system of the past. Tons of evidence and our guts tell us they are ineffective measures of performance. Often, the best performers do not get the highest performance scores. The more we try to fix the appraisal process, the more convoluted and difficult to administer it becomes.

The appraisal process is threatening for both the evaluator and the person being evaluated. Seldom has the evaluator been trained in judging performance, have a clear understanding of the position's expectations and have frequent opportunities to observe an individuals' performance.

Recent findings reveal the ratings are more a reflection of the rater than the person being rated. Even when the rating is objective, such as running speed; the rater will compare the speed to his own in order to make a judgment. Rating primes people for a fixed mindset, instead of believing capability can change.

Stanford psychologist Carol Dweck compared the effect of praise for talent and praise for effort. The difference in "You are a fast runner." (results in a fixed-mindset) vs. "You must have trained hard." (results in a growth-mindset).

Those who operate from a fixed-mindset demonstrate less performance improvement, do not attend to negative feedback or focus on the correct answer. From their view, they believe their talent precludes the need for effort. Motivation comes from others' approval and others' success means those other people are more talented.

When people have a growth-mindset, there is a belief of free will and effort being the path to success. These people examine what worked right and what didn't work to improve the process. When a supervisor has a growth-mindset, feedback is focused on effort, not ability; not simply more effort, but an examination of the effort to make changes to improve the outcome.

Any feedback is personal. Top-down, focused on what you can do to improve what is already done serves no purpose. It is grueling to pay attention to criticism of a completed task when so many other tasks are waiting. Such a session is ineffective. That said, a performance appraisal dredging up year-old information is a huge waste of time.

David Rock, Director of the Neuro Leadership Institute, and author recommends having the courage to toss out the numbers since ratings don't work. Ratings gear us toward a fixed-mindset. Rather than being the judge, be the coach. Having frequent structured conversations where the supervisor and employee share information about the desired outcomes.

Rock suggests establishing no more than four competencies for each employee to guide conversations. The documentation can be a running dialogue based on achieving the individual's or department's desired outcomes. A matrix with the four competencies along the top and check-ins on the side can allow for a quick note and an accurate description of the supervisor's and employee's focus and outcome.

Supervisors need to learn how to state goals and deliver feedback in a way that fosters a growth-mindset. Re-framing a performance problem as an opportunity for growth and examining what effort needs to be changed to improve the outcome is a healthy approach to performance management.