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Alternatives to Traditional Performance Appraisal

Performance evaluations often present a challenge to organizations--you know you should do them, but they are often ineffective at changing performance and uncomfortable for everyone involved. Many organizations approach performance evaluations in the traditional way, with an annual written appraisal that attempts to capture an employee's accomplishments and shortfalls. This approach has limitations in many work contexts, particularly as many people do knowledge work indepedently. Fortunately, other options exist! (Jump down to read them). But when do you know which to choose? It all depends on the size of your workforce and how your employees coordinate with one another. To understand this, we start with a fundamental understanding of work can be coordinated.

The scholar Henry Mintzberg revolutionized the way most of North America understood the role of managers and how work can be organized. In his 1979 book The Structuring of Organizations, he developed a framework to conceptualize different methods of getting work done. Accomplishing tasks-- whether at work, through volunteerism, or even in your own home--relies on two opposing principles: division of labor and coordination.

Division of labor occurs when the various tasks that need to be done are split up and assigned or taken. Tasks can be assigned in a number of ways, but most of the time, division of labor enhances specialization, or the ability for each person to focus on a small range of tasks. To illustrate division of labor, imagine that your family is hosting a large party. As you prepare, there are many tasks to accomplish—sending invitations, cleaning the house, buying food and paper goods, preparing food, answering the door, etc. As you prepare, each member of the household is likely to take on one or two tasks that they can do best in order to maximize efficiency. You might have your 10-year-old answer the door and take coats, but he’s not able to do the grocery shopping. And, you wouldn't have every person doing every task--you'd just get in each other's way and waste a lot of time.

But as anyone who has ever run a large work project or had a family prepare their home to host a party knows, division of labor also requires coordination. That is, all of the people doing the different specific tasks have to work in such a way that their efforts support one another. Elaborating on the party hosting example, if the adult in charge of buying food purchases the wrong ingredients, the person preparing the food can’t do that job properly.

Mintzberg’s categories of coordination of work are presented as five fundamental mechanisms:

  • Mutual adjustment: work is coordinated through informal communication

  • Direct supervision: one individual takes responsibility for others to complete work and gives directions

  • Standardization of work processes: there is a detailed process of how to do the work that is documented and shared

  • Standardization of outputs: the required results or end product of the work is specified, and workers do their work in the way they like to produce the outcomes

  • Standardization of skills: the skills and training needed for people to do the job are specified, and with these same skills, the work is done a specific way

Generally, as an organization grows, the coordination mechanism adopted must change and typically goes in order from mutual adjustment to direct supervision to standardization. Interestingly, when work becomes most complicated, the organization must revert back to mutual adjustment. Here’s an example. In the case of a startup, a firm may have begun with three founders. These three divided the labor based on their particular strengths, and used 1:1 discussions and other informal communications as they all worked together to get a project done. As the startup grows, more people are hired. Now, the three founders can’t complete all of the work on their own, so they bring in 6 more people and train them how to do the work by working alongside them and giving them direct supervision, letting them know when to take corrective action. In 10 years, the firm now has a staff of 300. The three founders can’t directly supervise all employees, especially since they’re now at three locations. Instead, they have standard operating procedures (standardization of work processes), sales goals (standardization of output), and a sophisticated onboarding and training program (standardization of skills). In 15 years, the founders pursue a new product, and it requires rapid change from those involved when new information is introduced. Thus, this new complexity requires more mutual adjustment because standards have not been set for the new project.

So what does this have to do with how your organization evaluates performance? A lot! The first foundation of effective performance appraisal is that it should be accurate. In other words, the rating (3 out of 5) or feedback (“You’re my best employee.”) given should be a true reflection of the level of work performance. When mutual adjustment and direct supervision are used for coordination, supervisors have a better chance of witnessing actual performance. When the organization is too large and work is done more independently, we can’t watch people do their work and have to instead rely on other cues, like their output, the number of errors they make, or their self-appraisal. So much of the work that is done in America today is knowledge work, where we can’t see inside someone’s brains to know what they’re doing. Add to that, organizations are flatter than ever before, meaning that we have more employees per supervisor and gauging performance is harder. Finally, flexible work arrangements like remote and hybrid work rely on employees working independently. Thus, the traditional annual performance appraisal in which the supervisor recalls the quality of work of each individual throughout the course of the year and rates it on a document likely doesn’t capture the nuance of today’s work, and doesn’t make much sense when coordination isn’t based primarily on mutual adjustment.

An increasing number of organizations are dropping annual written performance appraisals in favor of other options, which better suit today’s work coordination. They are summarized in the chart below. As you can see, the way work is organized can be a good fit for different types of alternative performance appraisal.

Performance Appraisal Alternatives

Performance Appraisal Approach

Description of Performance Appraisal

Fit with Coordination Type

Continuous Feedback or Frequent Feedback

Monthly or quarterly 1:1 feedback sessions focusing on smaller areas of performance, often with coaching

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Mutual adjustment: The 1:1 nature of the coordination is a perfect fit for frequent conversations that address performance.

Direct supervision: Rather than waiting a full year to give feedback, the supervisor can use immediate praise or corrective


Standardization of process: If the supervisor can see when a crucial process step is missed or an error is made, then immediate feedback is useful.

Management by Objectives

Employees and managers set specific, measurable goals, and performance is determined by seeing how well employees achieve the goals.

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Standardization of outputs: Outputs or outcomes such as volume of sales or number of projects completed are a great fit for setting goals.

​360-degree Feedback

Employees get evaluated by everyone around them—their supervisors, their subordinates, their coworkers, and their customers.

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Standardization of skill: 360-degree feedback is intended to develop the skillset of the employee to be able to achieve continuous improvement. With comprehensive feedback, employees can get the most input to develop and improve.


Employee complete a detailed appraisal of their own work (accompanied by evidence), organized around the employer's performance metrics, then followed by a supervisor appraisal.

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Standardization of process: Employees can give supporting evidence of their proper implementation of process.

Standardization of skill: Employees are encouraged to report improvements that they have made in their own skills.

Standardization of outcomes: A self-appraisal is a good supplement to measuring outcomes, as the employee can detail the work that went in to projects in which goals were met or not met.

The alternative performance appraisal techniques outlined above can be used in conjunction with or instead of traditional, supervisor-only annual performance appraisal. Whatever you choose, prioritizing accurate, developmental feedback and documentation of performance will go a long way to better performance management.

- Marcia Dickerson


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