Grote Consulting Resources

Dick Grote Interviews

Dick Grote on Performance Management

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Over the past thirty years, Dick Grote has been interviewed by publications around the world on every aspect of performance management. Excerpts from recent interviews, arranged by topic, appear below:

The Importance of Performance Management

“I think there’s a core flaw in the concept” of holacracy, [the management concept used by online retailer Zappo’s] Dick Grote, said in a February 16 interview with Bloomberg BNA. “The flaw is the abandonment of a structure, hierarchical management, that has worked for thousands of years.” He cited figures as diverse as Moses and Julius Caesar and organizations like the Catholic Church as examples of successful use of hierarchy. “There are bumps in the process, but there is nothing that has come along that beats hierarchical structure,” Grote said. Experiments like Zappos are “like trying to put 1800s Shakers into modern corporate culture,” he said.

Martin Berman-Gorvine, “Is a Manager-Free Company a Good Idea?” Bloomberg BNA, February 22, 2016

One of the big trends that we will see this year is an increased focus on excellence in managing performance. More than ever, companies are increasing their expectations from people in leadership positions, in terms of actively managing people’s performance by giving them honest and straightforward feedback, coaching team members more frequently, and meeting all of the organization’s performance appraisal requirements with higher quality standards. Companies are getting increasingly serious about insisting that everyone take performance management seriously.

Rajeshwari ari Sharma “In Conversation With Performance Management Guru Dick Grote” SHRM India March 1, 2012

Performance appraisal can give us the vital information we need to make wise compensation decisions and that is one of its most important uses. Performance appraisal is also a vital tool for determining an individual’s development needs, and for identifying who’s ready for promotion, and for supporting a decision to terminate an employee, and many other important business decisions. But for me, the most important reason we do performance appraisal is that it is a leadership obligation. Every person who works for any organization wants the answers to two questions: 1) What do you expect of me? And 2) How am I doing at meeting your expectations? So performance appraisal does far more than provide the basis for making compensation decisions. It is an ethical obligation of every person in a leadership position.

Komal Sharma “Appraisal is an Ethical Obligation” (The Wall Street Journal) December 25, 2011

Compensation Force: What led you to choose (or land in) a career featuring the field of performance management? Dick Grote: Receiving my very first performance appraisal. I received my first performance appraisal six months after I started as a management trainee at General Electric. It was brutally frank (and spot-on accurate) in pointing out the fact that I wasn’t doing a very good job. It provided the young kid I was then with a needed wake-up call, telling me that my school days were over and that tough, rigorous performance expectations were now in place. My boss’s straight-between-the-eyes candid feedback was the jolt I needed to get me to move out of the world of school and into the world of work. That was forty years ago, and I’ve been involved with performance management ever since. A few years ago I started a speech at a large HR conference with the words, “I have devoted my life to performance appraisal.” A man in the audience stage-whispered to the woman next to him loudly enough for me to hear on the stage: “Now there is a wasted life.” Perhaps, but I couldn’t be happier with having wasted my life in this field.

Ann Bares “Thought Leader Interview: Five Questions for Dick Grote” The Comp Doctor December 7, 2010

Employees and managers alike complain about the process being a tedious, biased, ineffective morale-buster. And where do they direct their grousing? The HR department. They see performance management as a process “concocted by the HR department and inflicted upon the organization,” says Dick Grote, founder of Dallas-based Grote Consulting, who specializes in performance management. Grote chooses his words for maximum effect. By “concocted,” he means a made-up idea. And by “inflicted,” he means to impose pain on others. What are performance reviews? Organizations spend millions of dollars hiring consultants, buying systems, tweaking forms and conducting training to fix what ails performance reviews. All these efforts are misguided, concludes Dick Grote of Grote Consulting. “Most believe performance appraisal fails because of the forms or the procedures are wrong, or the managers don’t know how to have the conversation,” he says. “All of those are true but secondary to the cause. The primary reason (it fails) is that people don’t understand what the appraisal is.” “So what is a performance appraisal? It’s a formal record of a supervisor’s opinion of the quality of an employee’s work,” says Grote. The operative word is “opinion,” he explains. Opinion does not mean subjectivity. The magic phrase in any performance appraisal is “for example.” As long as a manager can back up his opinion, it is an objective opinion, it is an objective appraisal. If the manager has been paying attention to the employee all year, then it is not subjective because he has seen the performance of the employee with his own eyes.

Adrienne Fox “Curing What Ails Performance Reviews” HR Magazine January 2009

Grote figures that in organizations of any size, 20 percent of the employees are stars and 70 percent are “journeymen,” the good solid employees who are the backbone of the company, said Grote, author of the book Discipline Without Punishment: How to Turn Problem Employees into Superior Performers. Ten percent, however, are mismatched for one reason or another. “When the economy gets bad, it’s an opportunity for a company to divest itself of the bottom 10 percent, said Grote, who is referring to the employees most bosses can point to who aren’t team players, prance around like prima donnas, or who are always second-guessing decisions. In good times the behavior isn’t bad enough for some to lose a job, he said. But when the payrolls have to be trimmed, you want people who are pulling in the same direction. And that’s perfectly understandable, Grote said. There is nothing wrong with wanting supportive people around who get along with each other.

M. Sixel “Poor Economy Burns Low Performers” Houston Chronicle January 28, 2009

Performance reviews are maintenance programs that keep your employees running in top condition. “Performance appraisals are even more important for the owner-operator of a small business than for a big corporation,” says Dick Grote, a Dallas-based performance management consultant. If you have only two employees dealing with the public, he notes, an underperforming worker will negatively affect 50 percent of your interaction with customers. “That’s a disaster,” says Grote. At the small organization, the owner can watch employee performance closely, adds Grote. “When people know what’s expected and they know how they are doing, they can do exactly what the owner wants, and that is powerful.” Of course, regular and specific workplace feedback is not a panacea. There’s real value in having structured annual discussions where supervisors and employees discuss how things are going and what steps need to be taken the year ahead. Indeed, sometimes the formal review is the only environment where sub-par performance can be addressed in a way that makes a difference. “Human beings have an infinite capacity for self-delusion,” notes Grote. “With some people it won’t matter how many times you have corrected them during the year. They will still say they did not understand.”

Phillip M. Perry “Great Performances: Four Strategies for Successful Employee Reviews” Self Employed November/December 2008

As hard as performance appraisal may be––and done right, it is hard––I’m convinced that we do it because it’s an ethical obligation of leadership. Every person on the team wants the answers to two questions: First: What do you expect of me? Second: How am I doing at meeting your expectations? The performance evaluation process answers those two questions. So why do we do performance appraisals? Not merely to justify salary increases, as Dr. Culbert (author of a book opposing performance appraisal) argues, although if you believe in pay-for-performance, you’d better have an effective way of evaluating performance. We do performance appraisal because as leaders we have a moral obligation to do so.

“Reviewing the Performance Review as an Effective Tool” The Wall Street Journal November 3, 2008

Left to their own devices, too many people with manager titles will give the goal-setting and feedback requirements short shrift. They’ll stick it on the “when I get around to it” pile. That’s why we need a formal process. Sure, the ideal is to have an environment of constant feedback and communication. But an environment like that is rare. That’s why it’s important to require managers to, at a minimum, discuss goals and expectations with each staffer at the start of the year, and then, at year’s end, evaluate how well that person has done. Reliability and validity are also worthwhile concerns, but you academics tend to make a much bigger deal of this issue than we practitioners do. No argument––reliability and validity are important. But companies aren’t psychology research labs. The question to which every employee wants the answer is, “Boss, how am I doing?” While on an organization-wide basis, if people are getting the straight scoop from their boss on their performance, that’s OK. But there is some good news here. Many companies actually are concerned with increasing reliability and validity and are setting up calibration meetings or “rater reliability” sessions. In these meetings, supervisors review with each other the performance appraisal ratings they’re planning to give their subordinates before they actually hand them out. They check each other’s intended ratings before they’re made final in order to ensure that people who work for different supervisors are held to similar standards and that there’s a level playing field for all. First, we need to forget about 360-degree feedback, at least for performance appraisal purposes. Certainly, 360 degree feedback may have a place––a minor place––in helping people get a better understanding of their development needs. But it has no place in conventional performance appraisal. To allow anonymous employee assessments into part of the formal evaluation tool does more than just encourage biased and self-serving responses––it poisons the entire well in terms of the original objective. It is particularly inappropriate to tie pay, promotions, development opportunities, and terminations––the things that a strong appraisal system controls––to anonymously provided assessments. The issue is not whether underlings and coworkers can provide relevant information. They can. The issue is whether they should be allowed to do so in a context where they cannot be held accountable.

“Are Performance Appraisals Worth the Hassle?” A debate between Dick Grote and Steve Scullen Across the Board (the Journal of The Conference Board) July/August 2008

The fear of firing is particularly acute in the HR and legal departments. They don’t directly suffer when an underperformer lingers in the corporate hierarchy, but they may endure unpleasant indirect consequences if that person files a lawsuit. Says Dick Grote, an Addison (Texas) talent management consultant: “They don’t get their bonuses based on the number of lawsuits they win. They get their bosses based on the number of lawsuits they don’t get in.” Many observers put much of the blame for fear of firing on HR. “The problem is much more with HR managers being nervous Nellies than it is a problem in actual legal exposure,” says consultant Grote. “The bigger risk is retaining poor performers, not terminating them,” he says, “provided the firing is done properly.”

Michael Orey “Fear of Firing” BusinessWeek April 27, 2007

Performance appraisals, done correctly, says Grote, can become the most valuable instrument in the manager’s toolbox. “No other management process,” he says, “has as much influence over individuals’ careers and work lives.” Let’s consider the benefits. On the most practical level, the few hours a manager invests in a careful appraisal process can help improve an employee’s performance for an entire year. More broadly, an effective evaluation process is part of the strategic first-rate people management that helps top companies succeed. In fact, many of the companies judged the best at performance evaluation in a 1999 survey conducted by the Houston-based America Productivity & Quality Center and the Lexington, Mass-based Linkage Inc., refused to divulge their evaluation techniques, viewing them as key components of their competitive strategies. “We would no more show our performance appraisal form to a bunch of outsiders,” said one participating VP of Human Resources, “than the Coca-Cola Company would let you come in and look over the secret formula for Coke.” A truly effective review process, Grote reminds his readers, is one that ties directly into the company’s mission statement and values. This principle may seem head-thumpingly obvious, but in practice it’s as rare as a consultant without a cell phone. Case in point: An informal survey Grote conducted several year ago, when speaking before a group of human resources executives from many of the companies in the Fortune 1000: “How many of you,” he asked, “can take your performance appraisal form in your left hand and your mission statement in your right hand, and walk up to one of your employees and say, `Harry, look! Do you see where the words in the performance appraisal and the words in the mission statement are the same words?’ If you can, raise your hand.” Of the 600 right hands in the room, only about nineteen went up. Would yours? One last practical tip: As you prepare for the review meeting, focus. People rarely hear everything you say, particularly when they are ill at ease or under stress. So if you want the employee to hear a core message, make it clear to yourself, Grote says. Imagine that a few weeks ago you had your annual performance appraisal discussion with Joanne. This morning, as you’re walking down the hall, you pull her aside and say, “Joanne, a few weeks ago we had a performance appraisal discussion. Tell me something. What do you remember from that discussion?” What is that one thing that you want to have stuck in her memory? Whatever it is, that is your core message.

Peter L. Allen “Evaluate This! The New Performance Appraisal” Working Knowledge Harvard Business School April 14, 2003

What is a Performance Appraisal?

Sure, there’s a level of subjectivity here, but every performance appraisal is ultimately subjective, Grote says. “An assessment is a formal record of a supervisor’s opinion of the quality of the employee’s work,” he points out. The operative word is opinion. It is not a testable, provable document, though it does need to be grounded in reality.”

Vadim Liberman “Performance Mismanagement” The Conference Board Review Summer 2013

“There’s an assumption that the reason we do performance appraisals is for compensation purposes,” says Dick Grote, founder of Grote Consulting and author of Forced Ranking: Making Performance Management Work (Harvard Business School Press, 2005) and several other books on performance management. That’s a bad assumption. “The real reason we do performance appraisals is because it’s an ethical obligation of leadership,” Grote told SHRM Online. “Every person who works for an organization wants the answer to two questions: What is it you expect of me, and how am I doing at meeting your expectations? That’s why we do performance appraisals.” “The fact that there are no merit increases has no bearing on that obligation,” he says. “That’s why a shaky economic climate offers an ideal opportunity for managers to encourage employees,” Grote adds. Unlike a year ago when the economic skies were blue, right now everybody is nervous about his or her job. “Such efforts might also pay off when times improve,” Grote says. Right now your best talent––your A players––really need to be told that the company values them because no matter what the unemployment rate looks like, they will always have options. The performance appraisal is the ideal time to deliver that message. “B players should be given as much peace of mind as possible he says, and C players should be given a wake-up call, such as `you really do need to change because you can’t just go someplace else right now.’”

Rebecca Hastings “When There’s no Pay for Performance” SHRM Online April 13, 2009

What are performance reviews? Organizations spend millions of dollars hiring consultants, buying systems, tweaking forms and conducting training to fix what ails performance reviews. All these efforts are misguided, concludes Dick Grote of Grote Consulting. “Most believe performance appraisal fails because of the forms or the procedures are wrong, or the managers don’t know how to have the conversation,” he says. “All of those are true but secondary to the cause. The primary reason (it fails) is that people don’t understand what the appraisal is.” So what is a performance appraisal? “It’s a formal record of a supervisor’s opinion of the quality of an employee’s work,” says Grote. The operative word is “opinion,” he explains. Opinion does not mean subjectivity. The magic phrase in any performance appraisal is “for example.” As long as a manager can back up his opinion, it is an objective opinion, it is an objective appraisal. If the manager has been paying attention to the employee all year, then it is not subjective because he has seen the performance of the employee with his own eyes.

Adrienne Fox “Curing What Ails Performance Reviews” HR Magazine January 2009


“Here’s where I start because people stumble on what exactly we are talking about: A performance appraisal is a formal record of a supervisor’s opinion of the quality of the employee’s work”, said Dick Grote, consultant and author of How to Be Good at Performance Appraisals. “It is an opinion, but it is an opinion based on observable behaviors.” Grote prefers a twist on self-rating. I ask them to give me a list of things from the last 12 months that they are proud of. I’m not asking for a balanced self-appraisal, just positive, good stuff. It gives the supervisor information from the employee’s point of view and a good grasp of his or her expectations in terms of the discussion. Paula Tarnapol Whitacre “Turning Performance Reviews into Useful Tools for All Concerned”. Administrative Eyecare Summer 2011

Dick Grote, author of Forced Ranking: Making Performance Management Work (Harvard Business School Press, 2005), and several other books on performance management, used to think self-appraisals were a great idea. “But in the last few years, I’ve changed my mind,” he told SHRM Online, because of the “infinite human capacity for self-delusion.” “Research consistently demonstrates that individuals are notoriously inaccurate in assessing their own performance, and the poorer the performer, the higher (and more inaccurate) the self-assessment,” Grote says. “Know yourself” may be good philosophical advice, but in assessing how good a job you’ve done, your boss knows better than you do. Accuracy is just one problem with self-appraisals, according to Grote. An added problem is the expectation that the act of self-appraisal creates. “The act of filling out the form sets up the understandable but erroneous expectation that (the employee) and his boss will then compare and contrast their two assessments (and will use) the appraisal discussion to come to common ground,” he says. But that’s not the purpose of the performance appraisal. “A performance appraisal is a formal record of a manager’s opinion of the quality of an individual’s work.” Grote says. Therefore, he says, the purpose of the performance appraisal meeting is for the boss to explain his evaluation and provide the rationale behind it. Grote notes that self-appraisals do work with some employees––those who have a great deal of maturity, a pretty firm grip on reality, and the ability to stand back and take a dispassionate look at the quality of their own performance. But there are not a lot folks like that around, he adds.

Rebecca Hastings “Manager, Employee Perceptions of Performance Differ” SHRM Online April 20, 2009

Goal Setting

“The better your appraisal, the more money you stand to earn, so rather than create genuine stretch goals, you can set bars too low, knowing that making the numbers also means making other numbers in your bank account. “Your weakest performers are going to latch on to the attainable part of SMART and set goals completely within their comfort zones,” says performance management consultant Dick Grote.”

Vadim Liberman “Performance Mismanagement” The Conference Board Review Summer 2013


Forced Ranking and Relative Comparison

#5—Assess Your Team: Determine who your A, B and C players are. Reward the A players, reassure the B players and remove the C players. Terminate marginal performers fast. Err on the side of speed. Remember, it isn’t the people you fire who make your life miserable. It’s the ones you don’t.

Hanah Cho Small Business Buzz “The Five” Dallas Morning News February 20, 2014

Management consultant Dick Grote is a former GE employee who wrote the book on what he prefers to call forced ranking. He says it works because it makes managers identify who’s great and who needs help. But even supporters like him admit the system has gotten a bad name over the years. “Virtually no one uses that term forced ranking anymore”, he says. “That carries so much negative baggage.”

Mark Garrison “Stack Ranking: The Inter-Office Hunger Games” National Public Radio’s “Marketplace” November 13, 2013

Dick Grote, a Dallas-based performance management consultant and author of a book about forced ranking, says the problem is partially the name, which conjures more negative associations than almost any term in the business vocabulary. Mr. Grote estimates that at least 30% of Fortune 500 companies continue to rank employees along a curve, doing so under softer-sounding terms such as “talent management.” “For example,” he says “a firm might mandate that only 10% of a supervisor’s employees can rank in a top category and 2% must be in the bottom group.” While true stack rankings are becoming rarer, “firms are looking for ways to add rigor to performance reviews and toughen up ‘easy graders’ in their management ranks,” says Mr. Grote, who works with large multinational industrial organizations.

Shira Ovide and Rachel Feintzeig “Microsoft Abandons ‘Stacked Ranking’ of Employees” The Wall Street Journal November 12, 2013

But Dick Grote, who literally wrote the book on forced ranking, notes that abandoning something that has proven unpopular is easier than replacing it. Employers still need to figure out who is doing well. “What we’re left with is a problem. It’s important that people’s performance be evaluated so they know where they stand,” he says.

Joshua Brustein “Microsoft Kills Its Hated Stack Rankings. Does Anyone Do Employee Reviews Right?” The Wall Street Journal November 12, 2013

There’s a quote floating around the Internet that some 60% of Fortune 500 companies are doing forced rankings. We traced down the source of the quote and asked him about the practice. It came from human resources expert Dick Grote, president of Grote Consulting and the research he did for his book, Forced Ranking: Making Performance Management Work (2005, Harvard Business Review Press). Surprise! Grote thinks forced ranking is “a wonderful idea,” he told BI. “Forced ranking done well––and that’s the caveat––is a very good thing for any organization of 10 people or more,”’ Grote said. That’s because forced ranking makes it impossible for managers to declare that all of their employees are above average, he says, and that makes it easier to find and retain the top guns. “When forced ranking is done right, most employees won’t complain. They will be happy not to have to work with underperformers.”

Julie Bort “Microsoft Isn’t the Only Tech Company Doing Forced Employee Ranking” Business Insider July 12, 2012

So who’s to blame for all the fear-mongering? Mostly the media, says former General Electric executive Dick Grote, who is now president of Grote Consulting Corporation in Frisco, TX, and specializes in helping organizations implement the tool effectively. When a big-name company such as Microsoft is sued for discrimination tied to forced ranking, on what page of the paper does that news appear? Page 1. But when the judge throws out the case and says there is no way he will allow the suit to go forward based on the paltry evidence, where does that news appear? Page 38––right under the obits. The result is that we have hyper-sensitized organizations to the risks associated with what is a valuable management process.

Sarah Boehle “Keeping Forced Ranking Out of Court” Training Magazine June 2008

Training to the Rescue: This, of course, is where training enters the picture. Indeed experts such as Grote and others contend that effective training is an essential ingredient for companies that want to ensure they use the system effectively––not to mention legally––and that managers are properly equipped to rate the performance of their teams and communicate the results. “For those identified as A players, it allows managers to nurture their most talented people”, Grote says. “For B players the good news is that they are part of the organization’s vital majority and are doing a fine job. For C players, the news may be painful. But if your company doesn’t feel that you are a strong player or have a future with the organization, and you are given the choice between ignorance and knowledge, wouldn’t you rather have knowledge?” “Another way to avoid age discrimination, in particular,” adds Grote, “is to clearly define what `future potential’ means before any ranking takes place. If you are projecting more than one job level up or more than two to three years out, it is going to have adverse effect on older people. So when managers talk about talent, they shouldn’t talk about ultimate potential, such as who has the goods to become CEO within the next 10 years. Instead, they should talk about each individual’s projected ability to perform at a fully successful level at the next higher job level, and within the next two to three years.”

Sarah Boehle “Keeping Forced Ranking Out of Court” Training Magazine June 2008

Dick Grote: There are two questions that I believe every single person in any organization wants answered: first, what do you expect of me, and second, how am I doing at meeting your expectations? The first question could be answered at the beginning of the year when a manager should have a conversation with each member of staff to discuss what needs to be accomplished. The second question is typically answered through a conventional end-of-year performance appraisal system which sees the manager evaluate how the employee has done in meeting his or her goals and objectives. But that’s only half of the picture. The other half is not about how well one person did in meeting his or her goals and objectives. It is about how good a job that person did compared with others. That’s where the forced ranking comes in. A key difference between conventional performance appraisal and forced ranking is that conventional performance appraisal uses an absolute comparison basis––how good a job George did against the objectives. One problem here is that if the manager’s goals are set low enough and he or she tends to be lenient, then anyone can be evaluated as exceeding expectations. Forced ranking, on the other hand, is a relative comparison process. In this process we ask not how good a job George did against the goal, but how good a job he did compared with other people. It is entirely possible for someone to be rated as superior in terms of meeting goals but to be listed in the bottom half of performers when compared with other people who did an even better job. This is the rationale for this forced ranking process. Another key difference between standard performance appraisal and forced ranking is that standard performance appraisal is entirely historical, i.e., it focuses on how well George performed over the past twelve months. The forced ranking process not only assesses performance but also potential, i.e., how well did George do in the past and how much stretch does he have for the future? Sarah Powell: What in your view are the major benefits of this system of talent management? Dick Grote: My answer will come as a surprise because everybody seems to assume that the major benefit to companies is sacking the bottom 10 percent, which is not the case. In my experience there are two major benefits. One is identifying the top 20 percent, but the second and real benefit to a company comes in knowing who are your best and most talented people, making sure you retain them, and ensuring that these are the people who get the rewards. This is much more important than getting rid of the bottom 10 percent. The other big payoff––and this is something that almost never gets talked about––is to the people who are doing the ranking as opposed to those being assessed, i.e., those tasked with identifying where the talent in the organization lies. Senior management in turn will identify which managers are best at this talent-spotting and who has the courage to stand up and challenge his or her peers and can articulate what makes somebody successful. The mistake organizations frequently make is to use training and development as a damage control strategy to shore up the weaknesses of those who are not doing well. That is a mistake. It’s a bad use of corporate assets. Training and development need to be directed towards the best performers, i.e., to polish diamonds, not polish coal. My advice has always been: don’t think about forced ranking as a permanent process; think about it as a short-term solution to the need to drive a talent management culture––work it for a year, look at the results, which are probably going to be pretty good; use it for another year, consider the results, they’ll still probably be pretty good; but by the third or fourth year, you’ve probably had most of the mileage out of the system. Sarah Powell: Forced ranking sounds not dissimilar from the sort of process used in selection and retention in officer assessment and promotion in the armed forces, progression in performance-oriented firms and government divisions and, of course, promotion in sport. In these cases the system has apparently neither needed a name nor been particularly contentious––why should it be different elsewhere? Dick Grote: I agree that it sounds not dissimilar but I think there is a good answer to that. Yes, this has been done for a long time in the military, in financial organizations in the city, in accountancy firms and so on, but it takes place on a casual, informal, off-the-record, over-the-water-cooler basis. In my view it’s far more ethical and rigorous to make this a formal process, ensuring that the criteria for promotion are clear and that managers enunciate the reasons for ranking one person ahead of another. We must shine the light of day on decisions that potentially have a profound impact on an individual’s future. In schools when ten or eleven-year old kids make up teams for a football game, a couple of kids are always the first to be chosen because they are the best at the sport. Then comes a large number who play reasonably well. Finally there are one or two who are always the last to be chosen because, frankly, they’re not very good football players. But the kids in this last category may, of course, end up winning the Booker Prize. Not being good at football doesn’t mean you’re not very talented at something else. With forced ranking all we’re saying is given the needs of the organization, you aren’t one of the best. It’s a kindness to help these people understand this, even though they may disagree so that they can try and identify where they can pursue a happy and successful life.

Sarah Powell “Spotlight on Dick Grote” Human Resources Management International journal Vol. 15, No. 2, 2007

“Managers are really pulled in two conflicting directions when they do performance appraisals,” says Grote. On one hand, they want to tell their people the truth about how well they’re doing. On the other hand, they want to be good to their people, particularly in the area of compensation. They want to give them as much as they can. These desires are inherently in conflict. If you tell the truth––you’re a good, solid performer: I rate you a 3––then you can’t give as big a salary increase as you could if you gave that person a 4 or a 5. “But the difference between a salary increase for a 4 instead of a 3 is not enough to feed a family of four at McDonald’s,” he says, “so every little bit you can do, you’re going to do.” “This often leads to the Lake Wobegon Effect,” says Grote, referring to the fictional town of Lake Wobegon from the radio series A Prairie Home Companion where, according to Garrison Keillor, “all the women are strong, all the men are good-looking and all the children are above average.” “In a similar way,” says Grote, “performance appraisals tend to rate most people above average.” The problem stems from the way performance appraisals traditionally have been conducted. “In a good system, it begins with performance-planning conversations at the beginning of the year,” says Grote. Your employees want to know, `What do you expect of me?’ So you sit down with them and talk about goals, competencies, company values, expectations and how they’ll be measured. Then at the end of the year, the employees ask, `How am I doing?’ “Therein lies the rub. That question can be answered in two ways,” Grote says. Typically an employee is answered with an absolute comparison of how good a job he or she did against the goals, objectives and competencies that were discussed at the beginning of the year. Now, however, companies are beginning to answer the `How am I doing?’ question with a relative comparison––that is, telling the employee how good a job he or she did compared with how others did. “If a manager’s standards are low, it’s easy to say all of his or her people exceeded expectations,” says Grote. But if you’re asking on a relative basis who your top 20 percent are, who your middle 70 percent are, who the bottom 10 percent are, you could still have good performers––on a team of all-stars. Put another way: An employee could have a goal of, say 100 units and achieve only 98 in the given period of time. On an absolute basis, that employee failed; but on a relative basis, the employee might have achieved more than anyone else in the department; so, on a relative basis, that employee is the best there is. “It’s a different way of looking at things,” Grote says. And that’s what organizations are looking at more and more now. They’re bringing in the expectation that mangers will not only look at how employees did on an absolute basis, but are also starting to look at them on a relative basis too. That how they figure out who the stars are’.

Julie Liedman “Honest Appraisals” Human Resource Executive May 2007

Training Magazine: What differentiates conventional appraisal and forced ranking? Dick Grote: Almost every company has a conventional performance appraisal system where once a year people are evaluated according to how well they met their objectives and achieved their goals. And, conventional performance appraisal uses an absolute basis of comparison. That is, the question you’re asking in conventional performance appraisal is how good a job did George do against the goals and objectives that were set, and if the manager isn’t that tough, and doesn’t set the goals that high, then anybody can be rated as superior. One of the frustrations of executives and senior human resource managers is how to get the truth into the system. How do we build in––and here comes the key word––differentiation? How do we get managers to recognize that there really are differences in talent? What they’re finding is that the conventional performance appraisal process, as important as it is, isn’t getting there. We need something else, and the something else is forced ranking. TM: And why is it so controversial? DG: In forced ranking you’re evaluating the person in a different way: it’s now a relative comparison. You’re no longer asking how good a job George did against his objectives. Now what you’re asking is, how good a job did George do compared to how well Mary, Sam and Bob did. That’s a much more difficult one, and managers tend to be very reluctant to say George is as good as Sam but not as good as Mary. “TM: How do you make sure employees don’t feel pitted against each other, and that it doesn’t interfere with employee morale? DG: One of the misconceptions of forced ranking is that by doing a person-to-person comparison, a relative comparison, then automatically you generate a hyper-competitive, Darwinian, dog-eat-dog environment. That’s not true. If it’s done poorly, if it’s done the way Enron did it, then, of course, it’s not going to do well. One of the easiest ways of overcoming that is to have teamwork be one of the criteria used to evaluate people. How good a team player is this individual? Once people discover that one of the criteria being used in the company’s forced ranking process is cooperation, they start becoming real cooperative. TM: When you talk in your book about “forced distribution,” what are you referring to? DG: Companies often get frustrated that managers aren’t really telling the truth (on conventional appraisal forms). Managers are rating everybody as above average, everybody gets a superior rating. One a five-point scale, everybody is a four-or a five. This is one of the most common complaints. One way of controlling it is to say only a small percentage of people can get the highest rating, and another certain small percentage must get the lowest rating. What you’re really doing there is forcing more of a bell-shaped curve. That’s forced distribution. TM: Do you think it’s a good idea? DG: It’s a good idea if it’s introduced right, and by introduced right, I mean letting people know what the company is doing, presenting it as guidelines and not as rigid rules that have to be followed, allowing managers that have a really high performing unit to make a business case for exceptions, and publishing what the distribution of performance ratings within the company is, so managers can see how their own ratings compare with the company. TM: What are some common pitfalls when it comes to forced distribution? DG: The one big one is to force the distribution to resemble a pure bell-shaped curve. That is, that there must be 10 percent at the top end and 10 percent at the bottom end. That’s a mistake because the pure mathematical bell-shaped curve is only valid if you have random distribution, but we don’t hire people at random. We hire the best we can find. We promote the best we can find. We give people training all the time to increase their skills. Since you should expect more good performers than poor performers, it’s appropriate that recommended distribution recognize that.

Margery Weinstein Rank & File: Measuring Your Employees” Training Magazine December 2005

Performance Management Techniques

‘‘It’s a very good idea to decouple the compensation conversation from the performance feedback conversation,’’ Dick Grote, founder of performance management consultancy Grote Consulting Corporation in Frisco, Texas, told Bloomberg BNA in a December 6 e-mail. ‘‘Hold the conversations at different times, in separate meetings. That way only one item at a time is talked about, and the manager is assured of the employee’s full attention.’’ Dick went on to say, ‘‘Evaluate an individual’s performance using both an absolute comparison and a relative comparison approach. With absolute comparison, the manager asks the question, ‘How good a job did Joe do in meeting his goals and expectations? Did he exceed my expectations, or meet the expectations, or miss meeting the expectations?’’’ In relative comparison, the manager asks how good a job the employee did compared with his or her teammates.

Martin Berman-Gorvine, “Should Boss Cover Performance, Salary in One Talk?,” Bloomberg BNA Human Resources Report, December 12, 2016

As performance management continues to evolve, some experts have advised moving away from PIPs in favor of a more direct approach. Dick Grote, president of Grote Consulting Corp., a performance management firm, is among those opposed to PIPs. “The best thing for an organization to do when they realize that this simply isn’t working out is to use a procedure called a ‘decision-making leave,’ ” he says. This is effectively a paid day off during which the employee is asked to reflect on the performance feedback she has received and to ask herself if she is willing and able to meet the company’s expectations.

“When they come in the next day, they’ll tell you one of two things,” Grote continued, “either that they’ve decided that they can change and can meet all of the expectations at a fully satisfactory level or they’ve decided that this isn’t the right job.” In his experience, most will come to the latter conclusion.

Elisabeth Greenbaum Kasson, “How to Fire Someone Without Getting Sued,” HR Magazine, June 1, 2016

It’s normal to get a sinking feeling when one of your employees says, “I have something to tell you.” No manager wants to hear that someone on their team has another job offer in hand. But how should you actually respond to the news? Should you counteroffer? Or just accept that they’re moving on? And how can you tell if the employee is just bluffing to get a raise? Instead of panicking, make the most of the situation. “Whether or not the employee ends up taking the other offer, this is a rich opportunity,” says Dick Grote performance management consultant and author of the HBR Tools on Goal Setting and Performance Reviews.

Amy Gallo, “What to Say and Do When Your Employee Has Another Job Offer,” Harvard Business Review, May 31, 2016

No matter who’s making the request when an employee asks for a raise, your star performer or an average one, you’re likely to feel taken aback or annoyed at being put in this position. Most managers do, says Dick Grote, performance management consultant and author of How to Be Good at Performance Appraisals. Resist the urge to say something like “It’s not up to me” or “I can’t decide that,” which undermines your authority. And watch your facial expressions and body language as well as your words. If word gets out that “the way you can get a raise is simply by asking for one, you’re going to have a line outside your door,” warns Grote.

Amy Gallo, “How to Respond When Your Employee Asks for a Raise,” Harvard Business Review, February 17, 2016

“Firing is the single most difficult thing we ask leaders to do,” according to Dick Grote, a management consultant in Dallas, Texas, and author of How to Be Good at Performance Appraisals. “Even when the business justification is clear, you’re sitting down and telling someone that he’s no longer getting a paycheck and that when he wakes up in the morning, he has no place to go. That’s tough.” If you’re having trouble mustering the courage to act, Grote advises you to think about your team. “After all, they’re the ones who are picking up the slack and maybe working longer hours because the person you need to fire is not doing his job correctly.”

Rebecca Knight, “The Right Way to Fire Someone,” Harvard Business Review February 5, 2016

“If you want people to perform well, you have to get them off to a good start. That’s kind of obvious, isn’t it?” says Dick Grote. It’s important to be thoughtful and deliberate about their first few months. Ask one person to act as a sponsor, advises Grote, and designate him or her to be the go-to person when the new teammate runs into problems. This is good for the sponsor, for whom this is an opportunity to demonstrate leadership skills as well as the new employee. “Ask your existing employees how long it took before they felt they were part of the team. What they say is the best data you’re going to get,” he advises. While you’re at it, ask them about their overall onboarding experience. “The old-timers won’t remember, but those hired two months ago will have feedback about what they wish they’d learned earlier,” Grote says.

Sara Stibitz, “How to Get a New Employee Up to Speed,” Harvard Business Review May 22, 2015

Grote said that applying 360-degree feedback to development or coaching probably doesn’t do much harm, “but when it’s used for determining compensation and/or promotion, misleading information might be provided by the office screw-up who doesn’t know anything anyway. And also by the guy down the hall bucking for the same promotion I am (who) wants to put a dagger in my ribs.”

Steve Taylor “Assess Pros and Cons of 360-Degree Performance Feedback” SHRM Online July 11, 2011

When management expert Dick Grote gives a speech, he often asks how many in the audience have a formal set of company values and how many have formal appraisal systems. Most hands go up for both questions. But when he asks if the performance appraisal forms reflect the values statements, few people say yes. “Leaders of very few companies hold people accountable for company values on performance appraisals or any other mechanism,” says Grote, founder of Grote Consulting Corporation in Frisco, Texas, and author of the book, How to Be Good at Performance Appraisals. Not all values are appropriate to include on a performance appraisal form, Grote notes. For instance, Can you assess employees on a 5-point scale on their ethics? What would a 3 rating look like? You assume everyone in the organization has ethics. If they didn’t have a fully functioning ethical and moral compass, you would terminate them. Grote describes how HR professionals for an oil company resolved this dilemma. The company listed “Ethics” as the first value and pre-populated it with the highest rating of 5. Below that section was a note: “If for any reason a 5 is inappropriate for this individual, a serious conversation must occur with HR.” This demonstrated the importance of ethics as a company-value and encouraged managers to talk with employees about it.

Kathryn Usrey “Evaluating Values” HR Magazine April 2011

Dick Grote, a Dallas-based management consultant, says `problem’ employees can also be brought into line through the use of an unexpected performance appraisal, where a manager fills out the form and gives the employee the lowest possible rating, and then calls him or her in for a meeting and hands over the appraisal. “It doesn’t have to be completely filled out, just the appropriate areas,” he says.” Then tell him or her that it’s not official, but, unless there’s significant change on their part, then this is why they’re going to see when it comes time for annual reviews.

Michael O’Brien “Hard Talks” Human Resource Executive Magazine December 2010

“Documentation is so easy, and companies get it so wrong,” said Dick Grote, founder of Grote Consulting and author of Discipline Without Punishment (AMACOM, 2006). There is an erroneous notion that what you are documenting is the existence of the problem. He said the real purpose of documentation is to make a record that a conversation took place. As such, the need for an employee’s signature is much reduced. The reason the nasty signing business comes up, he told SHRM Online, is to prevent supervisors from writing an employee up and dropping the documentation into the employee’s file, sight unseen.”That’s why it’s important to be sure that the documentation follows the discussion,” Grote noted.

Rebecca R Hastings “Discipline: The Fine Art of Documentation” SHRM Online February 3, 2010

Grote says the performance management process in many organizations lack sophistication. It’s an annual fill-out-the-form, sit down with Charlie, give him his 2 percent increase and say “see you next year” sort of process. “One reason managers don’t like performance appraisals is that nobody has ever told them in simple terms what the objectives for a performance appraisal conversation are,” Grote says. It’s very simple. For those people who are doing well, and that’s the great majority, the object of the performance appraisal discussion is for the manager to say “thank you.” “For the small group of people who are failing to meet expectations, either in terms of behavior or results,” Grote says “the key message is not `I need to thank you,’ but `I need to warn you.’”

Rebecca Hastings “Manager, Employee Perceptions of Performance Differ” SHRM Online April 20, 2009

“First you need to understand the problem you are dealing with. From there you need to establish not only the desired behavior you are after and the current level of actual performance, but also, how do you go about closing that gap? The supervisor is responsible for clearly identifying the gap,” says Grote, who is also president of Grote Consulting Corporation in Dallas, Texas, “but the employee is the one responsible for closing the gap––for doing the job right.” You also need to be specific about the consequences, whether it is that they will be transferred to a different position, usually one with less money and prestige, or they may be terminated. This gives them a clear understanding of what is at stake. Having a specific plan is also important because if they do not follow through with it, there is even more at stake than just their performance, explains Grote. If you and the employee have come to an agreement about changing their behavior––like the example of Harriet being late––but then Harriet continues to be late after you have provided her with a more flexible schedule, then the issue isn’t just about her failure to follow through. She has failed to honor her agreement, Grote explains, and then the question becomes, How can we maintain an employment relationship with someone who doesn’t honor her agreements? That’s the powerful message that employees need to understand.

Nancy Hatch Woodward “Performance Anxiety: Helping Employees Improve” Workforce Management Magazine October 10, 2008

“If organizations require real performance appraisals more frequently than once a year,” Grote says, “they’ll get a lot of managerial resistance.” “You’re asking managers to sit down, face to face, and tell people the truth about exactly how they’re doing,” he says. “It’s a formal record of a supervisor’s opinion of the quality of a person’s work.” “Indeed it’s the sheer importance of performance reviews––which typically drive decisions related to compensation, promotion, training and even termination––that makes increasing their frequency a potential setback for an organization,” says Grote. “So we better get it right,” he says. And to get it right, it takes a lot of time––time to meet at the beginning of the year to make the company’s expectations clear, time at the end of the year for the supervisor to render his opinion about how well the person has performed, time during the year to give the person the opportunity to meet his goals, and time for the supervisor to take notes on the person’s performance so that at the end of the year there’s a clear record. “Ongoing talk throughout the year is fine,” says Grote. “But I don’t see companies doing formal performance reviews more frequently than once a year.”

Julie Liedman “The Ongoing Conversation” Human Resource Executive November 2006

While most managers feel reasonably comfortable talking about people issues when the employees involved look just like they do, anxieties increase when diversity issues crop up. The best way to proceed is to focus on performance. Managers today have been so excessively sensitized about the importance of diversity and respecting cultural differences that many have missed the much more important issue––the need for every member of the team to do the job they are paid to do. As long as the manager is clear on the exact gap between what is expected and what is delivered in the individual’s performance, diversity and cultural issues are secondary. They key here is not be distracted by the differences but to focus on the fundamentals––and the most basic of fundamentals is that you must do what the association pays you to do. Of course, it’s appropriate and, in many cases, legally required to make reasonable accommodations to meet the needs of a wide range of people. But tolerating poorer performance from Jane than from Joe out of misplaced concern for tolerance, diversity and respect for cultural differences is insulting to Jane and unfair to Joe. The fair thing for everybody is to ensure a level playing field for all. The same performance, attendance, and conduct standards should apply to each member of the team.

“How to Straighten Things Out” Associations Now American Society of Association Executives September 2006

International Performance Management

Grote, who has spent three decades specializing in performance management, said that some countries, such as Korea and Germany, use performance management processes that closely parallel those used in the United States. The same is true for France, though he noted that there Is less of a connection between performance and pay in that nation. “However, the Japanese and American processes have ‘diverged significantly’ over the years,” according to Grote. The Japanese system is frequently and even intentionally and openly, used as a means of discriminating against “undesirable employees,” a practice that is prohibited under U. S. civil rights laws. And although the performance appraisal process involves filling out the appraisal form, and discussing it with the employee, Grote said that in Japan the appraisal process often involves only the completion of the form without the discussion between boss and subordinate of the results of assessment. Those who work in the U. S. often put a great deal of value on the information that comes from 360-degree feedback, according to Grote. “But in a country like India––which tends to be more collective than individualistic and which embraces a high-power distance or inequality of power, there is less value placed on the opinions of others,” he said, “and it would be seen as inappropriate culturally to ask employees to fill out a questionnaire on their boss.’ Grote said that Filipino managers engage in a practice called “smooth interpersonal relations.” If a boss has a problem with one of his subordinates, he won’t talk directly to the subordinate about it. Grote explained that he will instead tell his wife because he knows his wife’s cousin’s hairdresser is related to the problem employee. The main objective of performance management, according to Grote, is to make sure that employees know what the company expects of them and how well they are meeting expectations. “That’s independent of culture,” he said, though he said that organizations “may have to tailor and adapt processes in order to make them culturally comfortable.”

Rebecca Hastings “Customize Performance Management to Fit Global Cultures”: SHRM Online September 16, 2009

“It’s like trying to teach a fish the concept of water,” said Dick Grote, founder of Grote Consulting and author of Forced Ranking: Making Performance Management Work (Harvard Business School Press, 2005) and other books on performance management. “We are so surrounded by our culture we don’t recognize it.”

Rebecca Hastings “Culturally Competent Performance Discussions” SHRM Online September 16, 2009


“Few things come out lower on employee engagement surveys than performance appraisals, but we do them because the data is needed to ensure fairness with compensation, promotions—or terminations,” said Dick Grote of Grote Consulting Corporation during his presentation at the 2014 WorldatWork Total Rewards Conference, held in Dallas May 19-21, 2014. “A good system doesn’t start with assessment; a good system starts with performance planning,” he noted. “Performance appraisals will always be difficult, but managers make them even more so when they don’t make their objectives clear at the start of the year” — for instance, regarding expectations for measurable outcomes and accomplishments (results) and demonstration of competencies (behaviors). “If you believe in pay for performance, you must have data to differentiate where people stand,” Grote explained. He proposed the radical notion that performance management systems can actually work, and that employers have “an ethical obligation” to employees to see that they do. To ensure that performance appraisal ratings are accurate, organizations should use ratings distribution guidelines, have appraisals reviewed by the appraisal writer’s supervisor, and hold calibration sessions.

Stephen Miller, CEBS “Improving Performance Evaluations Using Calibration” SHRM Online May 23, 2014

Grote explains calibration this way: Remember in college and you had professors who were easy graders and professors who were hard graders, and everyone knew who was who? That’s fine in college, but it’s not OK in the workplace when it impacts compensation and promotions and who gets chosen for a layoff. In the last few years, companies have asked Grote to lead calibration sessions as a third-party adviser. Before these sessions, each supervisor fills out performance appraisal forms and comes up with suggested ratings. Then, a group of supervisors, usually in the same division, reviews everyone’s ratings. Grote designates a flip chart for each numerical rating and assigns each supervisor a different colored Post-it note pad. He then asks the supervisors to write the names of the employees on notes and stick the notes on the flip chart of the ratings they would like to give. “Because of the different colors, you see pretty quickly which supervisor is an easy grader and which is a hard grader and which one always goes for the middle ratings,” he notes. Grote also advises supervisors to use the full width of the flip chart so if one employee is a solid “meets expectations,” the Post-it note goes in the middle of the chart. But if another employee is a “meets” on the border of “exceeds,” then the Post-it goes toward the right edge of the chart. This creates a healthy dialogue among managers about what constitutes “exceeds” vs. “meets.” “You get managers in other departments talking about this one employee,” says Grote. It exposes talent to a much larger group of managers. In addition, it motivates the manager to work really hard to justify the ratings of his employees because he knows they may be subject to debate in the calibration meeting. The disadvantage is the added layer of administration, but I think even managers would agree that it’s worth it.

Adrienne Fox “Curing What Ails Performance Reviews” HR Magazine January 2009

“It is not OK to have performance rated differently from manager to manager because these decisions impact compensation, development and succession planning,” says Dick Grote, a performance management expert and president of Grote Consulting Corporation, a management consulting firm in Dallas. Thus, some companies use the practice of calibration to make sure performance appraisals remain consistent across managers. More than simply ensuring fairness in the performance-rating process, conducting calibration meetings allows appraisers to gain insight into who and where their up-and-coming star performers are, to gauge the depth of leadership pipelines, and to ensure that all employees will be evaluated on the same criteria and standards––no matter where they work or to whom they report. A group can begin the calibration process with outliers––for example, employees who rate a one or a five on a five point scale––because their performances are so clearly good or bad, and create less to discuss. “The toughest calls are likely around employees who are high-end threes or low-end fours,” says Grote. These decisions require judgment calls to differentiate among employees on the cusp. “This is where calibration pays off, because those individuals have the potential to be the stars, and the company must identify them accurately,” he says. Consistency in performance ratings becomes particularly important following a merger or acquisition. “Following an acquisition, calibration is virtually mandatory because the two companies will have two different cultures and different expectations of performance,” says Grote. “Get people with different backgrounds together to talk through those issues.”

Joanne Sammer “Calibrating Consistency” HR Magazine January 2008

How to Get a Good Performance Appraisal

So this hasn’t been your year at work. Maybe, you started well, but lost our way. To add to your troubles, the economy went into a slowdown and made your targets a bigger challenge. Or maybe, you just took it easy. Or, your boss changed midway. Or your KRAs. Whatever, the thing is that now’s appraisal time, the first HR mails are landing in the inbox, you think you are in for a rotten evaluation from the boss. After all, what can be done in three months––January to March, let’s say––to make up for nine months of cutting a sorry figure at work? Don’t give up. Read on. Listen to what one of the world’s foremost appraisal experts has to say, “Yes, it is definitely possible––even likely,” says Dick Grote, author of How to Be Good a Performance Appraisals. Here’s why. Bosses have poor memory. The most common appraisal error bosses make is the “recency effect,” according to Grote. If you have had a great nine months, but were average to poorly performing in the three months leading up to an appraisal, most bosses will unthinkingly base the whole year’s rating on the most recent performance. “That is the period the manager most clearly remembers, and few managers have the discipline to maintain regular performance records all year long,” says Grote. So, turn this around. Take advantage of this trait. You have had a bad nine months, but if you can excel in these three months, the recency effect will work in your favour. “Recency effect will work in the employee’s favour if she can make herself look as good as possible during the month or two before the manager picks up his pen and starts wiring his assessment on the appraisal form.” advises Grote. Plant a seed in the boss’s brain. Plant a thought. It never hurts. You can approach the boss and say––respectfully––“Boss (or Sir/Ma’am), I’ve been working hard the past few months. But I know that you’re really the best judge of that. Did you notice any progress?” Now, here’s the trick. Hardly any boss will be willing to admit they haven’t been paying attention to subordinates’ efforts (although many bosses, in fact, don’t pay attention). And few bosses will want to be brutally frank and say, “Nope, you are exactly where you were. I don’t see any change.” Therefore, when it comes to writing your appraisal, that seed you planted in the boss’ brain about your self-improvement efforts may well produce a crop of positive assessments. Worse case, as we said, it won’t hurt. Focus on celebrating success or correcting problems––not both. For decades managers have been told they should discuss both an employee’s strengths as well as the needs for improvement in the same appraisal discussion. That’s terrible advice. It explains why most people hate performance appraisal discussions––they don’t get one clear message. This year, when you talk with the majority of your good employees, concentrate only on recognizing their achievements and thanking them for their contributions. Let them bring up any improvement needs. And for your few shoddy performers, devote the whole appraisal session to insisting on immediate and permanent correction. Sending the traditional mixed message of both good and bad stuff confuses everybody. Determine your core message. Assume three weeks have passed since your performance appraisal discussion with one of your staff members. You run into that person in the break room. “Tell me,” you ask, “what do you remember from that appraisal discussion we had a few weeks ago?” What is the single most important thing you want that person to remember weeks later? Figure that out before you start the appraisal discussion. Doing so will keep you on track and make sure that the staffer remembers what’s really important and not some insignificant side remark.”

Saumya Bhattacharya “How to Crack Your Appraisal in Three Months’ Economic Times (India) January 8, 2012