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Strength-based performance appraisal and goal setting
Osnat Bouskila-Yam
⁎
, Avraham N. Kluger
1
School of Business Administration, The Hebrew University-Mt. Scopus, Jerusalem 91905, Israel
article info abstract
Many supervisors and subordinates hate performance appraisal exercises. Moreover, the
benefits of performance appraisals for organizations are questionable. To address these
challenges, we participated in the development of an alternative Strength-Based Performance
Appraisal (SBPA) and a goal setting process, considering ideas both from performance
appraisals practitioners and from Positive Psychology scholars. SBPA emphasizes learning from
success stories using the Feedforward interview [Kluger A.N. and Nir D., 2009. The feedforward
interview. Human Resource Management Review 20,235–246.], reflected best self [Roberts L.M.,
Dutton J.E., Spreitzer C.M., Heaphy E.D., Quinn R.E. 2005. Composing the reflected best-self
portrait: Building pathways for becoming extraordinary in work organizations Academy of
Management Review 30(4),712–736], finding new ways to use existing strengths (Seligman,
Steen, Park, & Peterson, 2005) and a win–win approach (Pruitt & Rubin, 1986). However, SBPA
does not avoid negative feedback; it constrains it for prevention-focus behaviors, where it
appears to be effective in increasing motivation and performance [Van-Dijk D. & Kluger A.N.
2004. Feedback sign effect on motivation: Is it moderated by regulatory focus? Applied
Psychology: An International Revie w, 53(1), 113–135]. Following an elaboration of the
theoretical rationale of SBPA, we describe a case study of applying SBPA at SodaStream
(formerly Soda-Club), coupled with an initial evaluation of its impact. We conclude with lessons
learned from the first implementation, followed by a call for replications.
© 2010 Elsevier Inc. All rights reserved.
Keywords:
Feedforward
Feedback
Performance appraisal
Positive psychology
Goal setting
1. Strength-based performance appraisal and goal setting
Human Resource (HR) managers frequently lead performance appraisals in their organization, hoping to provide a variety of
benefits (e.g., improved performance, creating an opportunity for superior–subordinate communication, data for personnel
decisions, and more, Coens & Jenkins, 2000). Yet, the putative benefits of performance appraisals are questionable (Smither,
London, & Reilly, 2005). Indeed, performance appraisals could even be destructive (Coens & Jenkins, 2000). To overcome the
potential destructive elements of performance appraisal, we developed and implemented, in collaboration with HR managers, a
Strength-Based Performance Appraisal (SBPA) by capitalizing on Positive Psychology (Seligman et al., 2005). Specifically,
borrowing from Positive Psychology, we applied in the SBPA the following six tools and principles: Feedforward, which is based on
Appreciative Inquiry (Kluger & Nir, 2009), reflected best self (Roberts, Dutton, et al., 2005), developing strengths (Seligman et al.,
2005), happiness research (Fredrickson, 2001), a ratio of 3:1 between positive and negative (Fredrickson & Losada, 2005), a win–
win approach (Pruitt & Rubin, 1986), and increasing collective efficacy (Bandura, 2006). These tools and principles were
integrated into an SBPA at an Israeli multi-national corporation — SodaStream. First, we describe the SodaStream challenge
pertaining to performance appraisal and review how universal that challenge is. Next, we elaborate on the principles and tools that
guided the development of the SBPA. Following this, we report on the processes of implementation, and then we describe the SBPA
process flow. Lastly, we report on an initial evaluation of managers' and employees' reactions to the process, ending with a discussion.
Human Resource Management Review 21 (2011) 137–147
⁎ Corresponding author. Tel.: +972 54 6884198(Cellular), +972 8 8691668(Home); fax: +972 8 8691668.
E-mail addresses: osnat.yam@mail.huji.ac.il (O. Bouskila-Yam), Avraham.Kluger@huji.ac.il (A.N. Kluger).
1
Tel.: +972 2 5881009(Office), Tel.: +972 2 6422361(Home); fax: +972 2 5881341.
1053-4822/$ – see front matter © 2010 Elsevier Inc. All rights reserved.
doi:10.1016/j.hrmr.2010.09.001
Contents lists available at ScienceDirect
Human Resource Management Review
journal homepage: www.elsevier.com/locate/humres
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2. Performance appraisal challenge
2.1. The performance appraisal challenge at SodaStream
SodaStream is the world's largest manufacturer, distributor and marketer of home water carbonation systems, operating in
more than 30 countries worldwide. Six years prior to our involvement with SodaStream, the HR department implemented a
performance appraisals process whose goals were a) to clarify company expectations b) to provide feedback to the employees on
their performance and set expectations accordingly, and c) to identify employees' weaknesses and challenges as a basis for a
development plan. The process flow comprised the following three stages: First, the managers filled out a performance appraisal
questionnaire. Second, the subordinate filled out a self-evaluation questionnaire. Third, the manager held an evaluation meeting
with the subordinate in which they discussed three strengths, three weaknesses, goals and an action plan for the next year.
Five years after implementing the process and after personnel changes in the top management team (TMT), the HR department
sought to design a new performance appraisal process. In preparation, they established two focus groups with 24 supervisors and
subordinates. Seasoned employees and newcomers alike responded to questions regarding performance appraisal (either at
SodaStream or at their previous workplace). Among the questions were: “Did you get feedback from your manager, either at
SodaStream or at your previous workplace? How did the feedback affect your work at SodaStream? Do you think it is essential to
have a performance evaluation process? What are the conditions that can make a performance evaluation process a success?”
Results suggested that managers did not provide feedback to their employees at SodaStream (“we don't receive feedback from our
managers”). The majority of the employees described unpleasant experiences in their previous workplace regarding feedback (“it
is a stressful period”, “the feedback meeting is a conflict meeting”, “it was devastating”; “the process was a waste of time”;
“feedback equals criticism and it is not nice”) and a minority described positive experiences (“managers dare to tell me things only
during feedback meeting”; “I had a dialog with my manager and I understood his expectations”). Most of the participants in the
two focus groups thought that it is crucial to have a performance appraisal process (“without feedback, it is as if you are navigating
without a compass”). They suggested that the following conditions have to be met for the process to succeed: a) positively
energize employees b) follow-up on the process c) raise employees' motivation d) make it short and simple.
Informed by the focus group results, an HR manager at SodaStream wished to implement a different performance appraisal
process, one which would not replicate the many problems identified in the focus groups. Consequently, she hired the authors,
along with a performance appraisal systems provider, as consultants to help design and implement such a process. The process
reported here was implemented with 26 managers and 64 employees for a total of 90 participants out of 700 employees in the
organization. Next, before describing the SBPA, we review the evidence with respect to problems with performance appraisal,
which shows that SodaStream is not alone in having to confront them.
2.2. The performance appraisal challenge: SodaStream is not alone
The experience in SodaStream is by no means unique. People in many organizations are dismayed by performance appraisals,
as indicated by the titles of at least three books that suggest putting an end to performance appraisals: “Abolishing Performance
Appraisals” (Coens & Jenkins, 2000), “Catalytic Coaching: The End of the Performance Review” (Markle, 2000), and “Performance
Conversations: An Alternative to Appraisals” ( Lee, 2006). The numerous problems with performance appraisals can be
summarized as follows: Performance appraisal does not lead to performance improvement, and performance appraisals destroy
relationships in organizations.
Note, however, that our review pertains to the typical performance appraisal in organizations and to the typical prevailing
practices. There are other extensive approaches to performance measurement and feedback that invest considerable effort in
identifying causes of performance success prior to constructing a feedback instrument. Such systems could yield large
performance gains exceeding one standard deviation, and these effects appear to depend on the constructive nature of the
feedback provided by the supervisor (Pritchard, Harrell, DiazGranados, & Guzman, 2008). Such an approach resembles findings in
the domain of teaching evaluations. Specifically, teaching evaluation does not appear to improve performance, unless coupled
with extensive instructor training (Marsh & Roche, 1997). Thus, we are not arguing that performance appraisals in general are not
effective, or even destructive. We do, however, argue that the typical performance appraisal, which is not accompanied by other
interventions, is ineffective and even destructive. Below, we review the quantitative evidence.
The practitioners claim regarding the typical performance appraisal, namely that performance appraisal does not deliver
performance gains, is substantiated with quantitative data. A meta-analysis of 24 longitudinal studies, which were based on a total
of 7700 employees, showed that improvement in ratings over time is generally negligible (Smither et al., 2005). Specifically, the
average time between appraisals was a year, and the (negligible) improvement in rating (uncorrected but weighted d-statistics)
was 0.12 for feedback from direct reports, 0.04 for feedback from peers, 0.10 from supervisors, and −0.04 for self feedback.
Additional quantitative data raise a general question about appraisals:
“The risks associated with implementing a 360-degree system can be illustrated by Watson Wyatt's 2001 Human Capital
Index (HCI). This is an ongoing study of the effects of HR practices on the stock value of more than 700 publicly traded
companies. One particular result was especially alarming. Of the companies surveyed, those that had implemented 360-
degree feedback had lower stock value! Specifically, the companies that used peer reviews had 4.9% lower market value than
did similar companies that did not implement peer reviews. Furthermore, companies that implemented upward feedback,
138 O. Bouskila-Yam, A.N. Kluger / Human Resource Management Review 21 (2011) 137–147
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where employees rated managers, had a 5.7% lower stock value than did similar companies that did not implement upward
feedback. Does this necessarily mean that implementing 360-degree feedback systems causes the stock price to decrease?
Based on the data collected, there is no definitive answer to this question. It could be that organizations that are not
performing well financially decide to implement 360-degree feedback systems precisely to help improve their performance.
Nevertheless, these results highlight the importance of following best practices in implementing 360-degree feedback
systems in order to avoid any negative consequences of implementing such a system.” (Aguinis, 2009, p. 194)
These financial data are consistent with the multiple reports regarding the consequences of performance appraisals for
relationships in the organization. Among the relationship outcomes, practitioners count destruction of appraiser–subordinate
relationships, fostering gamesmanship, undermining team work, and lowering morale (Coens & Jenkins, 2000; Markle, 2000).
These observations are consistent with much earlier observations of academicians who noted that “presentation of negative
feedback to subordinates is an unpleasant task and one that supervisors tend to avoid” (Ilgen, Fisher, & Taylor, 1979, p. 360). As a
result managers tend to distort negative information (Ilgen et al., 1979).
These relationship outcomes are thought to be the result of several false and untenable assumptions. One key false assumption
is that performance appraisal helps to develop those being appraised. Specifically, organizations often espouse a desire to manage
according to McGregor's (1960) Theory Y — The belief that workers can naturally enjoy work if given the freedom to express their
creativity and imagination. Yet, organizations typically put performance appraisal responsibility on the appraisers. This act reflects
the application of Theory X — The belief that workers despise work and, thus, must be controlled and coerced. Another false
assumption is the belief that individuals' behavior, and not the team's performance, largely determines organizational success. In
Peter Scholtes words: “We live our lives in webs of interdependence and yet we keep telling ourselves the story that were
independent” (Coens & Jenkins, 2000, p. 33). Therefore, Coens and Jenkins (2000) conclude that even though many managers are
doing their best to apply performance appraisals with a humane and considerate approach, these untenable assumptions will
repeatedly breed organizational problems. These problems can be solved only with a radical approach (including abolishing
performance appraisal) to attain the goals for which organizations currently employ performance appraisals.
Unlike the idea of abolishing performance appraisal, we sought to piggyback on a routine that is deeply ingrained in many
organizations and use the platform to work with different assumptions. That is, we sought to develop a system that is more Theory
Y in its nature, invites collaborative evaluation of the strength of the subordinate and collaborative planning in how to apply these
strengths into goal setting.
3. Tools and principles informing the design of SBPA
In negotiating our mission with TMT at SodaStream, we defined several goals for SBPA. First, SBPA should serve the
organization towards improving its performance and business result. Second, it should focus on employee's strength, yet without
neglecting problems. Third, it should reflect the double meaning of “appreciation”: (a) valuing; the act of recognizing the best in
people or the world around us, affirming past and present strengths and potentials; to perceive those things that give life (health,
vitality, excellence) to living systems, and (b) to increase in value, (e.g., as stocks might appreciate in value). Finally, it should allow
the organization to document the process for creating organizational memory and knowledge through a web application. To
achieve these goals we applied seven tools and principles (Feedforward, reflected best self, happiness research, developing
strengths, the 3:1 ratio & win–win approach) which are described next.
3.1. Feedforward
The Feedforward Interview (FFI) is a multi-purpose interview protocol designed to enhance employee performance and
improve collaboration between supervisors and subordinates (Kluger & Nir, 2009). That is, FFI may address the two key
shortcomings of the typical performance appraisal: it might build, rather than destroy, relationships in the organization while
supporting performance improvement. The FFI is a theory-based modification of the Appreciative Interview component of the
Appreciative Inquiry theory and method (Bushe & Kassam, 2005; Cooperrider & Srivastva, 1987; Whitney & Trosten-Bloom, 2003).
Among the unique features of FFI are elicitation of a specific story regarding a “full of life” experience at work, a reflection on the
emotions involved, an analysis of the facilitating conditions of that story, and a feedforward question comparing one's behavior or
plans to the just-discovered facilitating conditions. FFI emphasizes gleaning a detailed story from the interview (use of episodic
memory), supporting the discovery of a win–win story, actively listening to the interviewee, and triggering a discrepancy between
the internal standard for optimal conduct at work and one's behavior and plans (Kluger & Nir, 2009).
The FFI protocol (for a detailed protocol see Kluger & Nir, 2009) contains five elements:
(1) Introduction: “I am sure that during your work here you have had both negative experiences and positive experiences.
Today, I would like to focus only on your positive experiences.”
(2) Story: “Could you please tell me a story that happened at your work, during which you felt full of life (happy, energized),
even before the results of your actions became known?”
(3) Peak: “What was the peak moment of this story? What did you think at the peak moment? How did you feel at that moment
(including your physiological reactions)? ”
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(4) Conditions (learning; inquiry): “What were the conditions, in you, others, and the organization (physical, temporal) that
allowed this story to happen?”
(5) Feedforward question: “Recall the conditions that allowed you to feel alive at work. Consider these conditions as road signs
or a beacon that shows you how to flourish at work. To what extent are your current behaviors at work or your plans for the
immediate future taking you closer to, or further away from, the conditions that allowed you to feel full of life at work?”
The FFI was successfully used before a typical performance appraisal and was shown to yield new insights for the interviewing
managers and to reduce resistance to performance appraisal and to 360° feedbac k from consultants (Kluger & Nir, 2009). Moreover, in an
experimental testing in a laboratory setting, FFI was shown, in one experiment, to increase the positive mood of the interviewees and
perception of learning relative to a control group. In another experiment, FFI was shown to increase, relative to participants in a feedback
condition, (a) ideas regarding possible actions an interviewee can perform to achieve a personal goal and (e) self-efficacy (Rechter, 2010).
3.2. Reflected best self feedback (RBSF)
The RBSF (Roberts, Dutton et al., 2005; Roberts, Spreitzer, et al., 2005) is based on a strengths-based approach (Buckingham &
Clifton, 2001) that suggests that real excellence is a function of uniqueness. People excel when they understand their unique
patterns of strengths and learn how to broaden and expand these strengths and talents. Most personal development processes in
organizations, are based on a “deficit model” (Seligman & Csikszentmihalyi, 2000). According to this “deficit model” a person's
area of weakness is their greatest area of opportunity. Roberts, Spreitzer, et al. (2005) argue that this deficit model might diminish
people's chances of making their greatest contribution, performing at their best or achieving the sense of well-being that arises
from an integrated sense of “you at your best”. As opposed to the deficit model, the strength-based approach to personal
development assumes that progress toward excellence is not a function of improving on weaknesses, but is a function of building
on one's strengths (Roberts, Spreitzer, et al., 2005). According to the strength-based approach, weaknesses should not be ignored,
but managed by finding someone else to do the tasks one does poorly, or by developing weakness to an acceptable level of
performance. Parenthetically, we think people can cope with weakness (see the 3:1 principle below). Based on this orientation,
Roberts, Spreitzer, et al. (2005) designed the RBSF exercise. The exercise comprises three steps: request RBSF, analyze it, and build
on it. Specifically, the first step is the request for feedback on “you at your best” from 10 to 20 significant people (“best-self
stories”). The second step is analyzing the best-self stories to compose the reflected best-self portrait. Finally, participants build on
the previous steps to identify goals and develop action plans.
3.3. Happiness research
The happy/productive link thesis has fascinated organizations and researchers for decades (Kluger & Tikochinsky, 2001
). This
fascination led to massive research of the relationship between happiness, hope, optimism, resilience, well-being and success
across multiple life domains, including marriage, friendship, income, work performance, and health. Meta analytic results suggest
that happy people are healthier, more sociable, and perform more creatively than unhappy people, and that the causal direction
runs both ways such that the happy/productive link exists not only because success makes people happy, but also because positive
affect engenders success (Lyubomirsky, King, & Diener, 2005). Whereas positive mood or happiness might not be a panacea for all
performance issues (there might be tasks for which negative mood make people more accurate), at the very least positive mood
appear to make people more creative and more open, show less job withdrawal behaviors, earn higher income and display more
organizational citizenship behavior (Lyubomirsky et al., 2005). For example, the median correlation between positive affect and
various work outcomes is 0.29 for cross-sectional studies (K= 19; N=34,794), and the median correlation between experimental
induction of positive mood and creativity is 0.30 (K=34; N =2707). In parallel with these empirical findings, some of the links
between positive mood and performance are explicated by the broaden-and-build theory (Fredrickson, 2001). According to
broaden-and-build theory, positive emotions signal safety and flourishing, which allows investing in playful behavior that in turn
assists one to discover new behavioral repertoires. Therefore, in SBPA there is an emphasis on generating positive mood, but with
no neglect of issues that might trigger negative emotions to some degree (see the 3:1 ratio principle below).
3.4. Developing strengths
An empirical investigation of several methods designed to increase happiness and decrease depression (Seligman et al., 2005)
suggested that two one-week exercises were especially effective in increasing happiness and reducing depression even up to six
months after the exercise. These exercises were (a) writing down three good things that happened each day and why they
happened, and (b) finding each day a new way to use one's signature strengths (strengths identified by answering a web-based
strength survey). These results were found largely among individuals who spontaneously persisted in performing their assigned
exercise after the one-week of experimental intervention.
3.5. The 3:1 principle
In devising this principle, we were informed by optimal ratio of positive and negative emotions (Fredrickson & Losada, 2005),
by the theory that positive experiences increase willingness to accept negative but useful feedback (Trope & Neter, 1994; Trope &
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Pomerantz, 1998) and by self-regulation theory (Higgins, 1997) and research about feedback sign effectiveness (Van-Dijk &
Kluger, 2004; Van Dijk & Kluger, 2010). Specifically, happy people do not only experience positive emotions. In fact, happy people
tend to have an average ratio of 3:1 (more accurately a mean of 2.9:1) of positive to negative emotions (Fredrickson & Losada,
2005). A mathematical theory applied to this ratio suggests that with ratios greater than 11:1, the system might disintegrate
(Fredrickson & Losada, 2005). Some small amount of negative emotions appears to support human flourishing. Second, it was
shown that people who were first exposed to positive mood induction were more capable and willing to learn about their own
negative aspects (Trope & Neter, 1994; Trope & Pomerantz, 1998). A similar idea is supported by research on self-control and ego
depletion, which suggests that to be able to perform an aversive behavior (e.g., process negative feedback), we might need to find a
way to replenish resources beforehand (Baumeister, Vohs, & Tice, 2007). This might be made possible by being exposed to a 3:1
principle.
Finally, positive feedback seems capable of increasing performance that is driven by the promotion regulatory focus, while
depressing performance driven by the prevention regulatory focus (Van Dijk & Kluger, 2010). Specifically, Van Dijk and Kluger,
applying the fit principle (Higgins, 2000) of self-regulation theory (Higgins, 1997), firstly demonstrated that some tasks (e.g., tasks
requiring creativity), are perceived as promotion tasks, whereas other tasks, (e.g., those requiring vigilance and attention to
details), are perceived as prevention tasks. Second, as expected, they showed that, relative to negative feedback, positive feedback
increased self-reported motivation (Study 1) and actual performance (Study 2) among people working on promotion tasks.
Negative feedback, however, increased motivation and performance among individuals working on prevention tasks, relative to
positive feedback. This suggested that the 3:1 principle should not be blindly applied, rather the bulk of the positive intervention
should be directed to promotion behaviors such as creativity, initiative, creating new products and markets, etc., whereas the
negative feedback should be directed at prevention behaviors such as adhering to safety rules, orderliness, and punctuality.
In advocating the 3:1 principle, we recommend considering negative feedback for prevention behaviors. This is a departure
from recent practices of Appreciative Inquiry and other techniques informed by Positive Psychology. In so doing, we take a
balanced view that considers the perils of ignoring the negative aspects of performance (for a book review see Hayes, 2009) and
the dangers of using the positive as a manipulation (Fineman, 2006).
3.6. Win–win approach
Several models in the field of negotiation suggest that people in conflict have two independent foci of concern: oneself and the
other (Pruitt & Rubin, 1986; Rahim, 1983; Thomas, 1974). Negotiators who are only concerned with their own benefits might seek
a win–lose solution, whereas negotiators who are only concerned with the welfare of the other might agree to a lose–win solution.
The field of negotiation highly recommends the effortful search for a creative win–win solution that demonstrates full dual
concern (both for oneself and for the other). This principle was applied in SBPA in two ways. First, the principle of win–win is
embedded in FFI in that it seeks stories in which both the process and the outcome were beneficial for the storyteller (for further
details, see Kluger & Nir, 2009). Second, the win–win principle was embedded in the SBPA in the goal setting procedure.
Specifically, managers were instructed to design goals for their subordinates that would simultaneously address their unit
business goals (the interests of the company and the supervisor) and enable expression of subordinates' strengths in a manner
that would promote the subordinates' well-being. They were also encouraged to seek such win–
win ideas from their subordinates.
For example, a subordinate who is an engineer and who indicated that he enjoys imposing order on chaotic processes in the
corporation suggested that one of his goals for the next half year would be to create a cross-functional team composed of
marketing and product design personnel that would take responsibility, with him being responsible for production, so as to
coordinate currently chaotic processes that lead to miscommunication. If this activity would be deemed to address a business
need, it would be a win–win goal setting because both the natural skills that the engineer enjoys using and the business needs
could be realized.
3.7. Positive organizational core and collective efficacy
The last principle that guided us is that the SBPA should confer organizational benefits. At the organizational level, we thought
to create a shared mental model of the causes of current success of the organization. This idea is consistent both with practitioners'
and researchers' ideas about the importance of intervening at the organizational level. Specifically, in Appreciative Inquiry an
effort is being made to discover the positive core of the organizations (Ludema, Whitney, Mohr, & Griffin, 2003). Raising awareness
of organization-wide strengths and building the organization's capacity and resilience is also consistent with the concept of
collective efficacy (for a review see Bandura, 2006). Thus, the aggregated results of SBPA should be shared not only with TMT, but,
at least, with all involved in the SBPA process.
4. SBPA processes of implementation
Informed by the above theoretical considerations, we developed the SBPA process to address SodaStream's concerns. The SBPA
contains the following six stages: 1) The supervisor–supervisee meeting, which includes success stories told by the subordinate
using the FFI (Kluger & Nir, 2009), and enthusiasm stories that are told by the supervisor about the subordinate using the reflected
best self (Roberts, Dutton, et al., 2005); 2) Filling out questionnaires by both the subordinate and the supervisor, and preparation
of reports to be used by the supervisor; 3) A second supervisor–supervisee meeting, involving a strength-based evaluation
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discussion where the supervisor and subordinate find new ways to use existing strengths, and agreement on goals using the win–
win approach; 4) Creating an organizational map of strengths; 5)Staging a party to celebrate the process and the strengths; 6)
Implementing a follow-up process. Below, we trace the development of the SBPA and describe its process flow in detail.
4.1. Building partnerships
The SBPA process in SodaStream was made possible thanks to the TMT partnership. After the HR team became enthusiastic
about the idea of implementing the SBPA process, we proceeded to earn TMT engagement and partnership, as they are the main
change agents. The authors and the HR team held FFI with the CEO and other TMT members in a one-day session. The reactions
were mainly positive. The positive features of the SBPA, according to the TMT, are: (a) A focus on the positive, which they wanted
to enhance at SodaStream; (b) A revolutionary approach to management as a whole that focuses on building from strength and on
believing that cynicism can be overcome; (c) Energizing employees to be at their best for their own benefit and for the benefitof
the company as a whole.
Nevertheless, the TMT had some concerns that they requested us to address in the final product to be presented for their
approval. Their concerns were: (a) The process requires management and listening skills that are not possessed by all supervisors;
(b) Filling out a questionnaire after FFI has the potential to ruin the positive spirit created by FFI; (c) The process might be too long;
(d) Managers and employees might learn to cynically invent stories.
We modified our proposed SBPA. First, we offered training to all managers and subordinates who eventually participated in the
process. This addressed the need to train managers in listening and interviewing skills. Moreover, observing others become open
and honest about their own desires and aspirations for happiness in the workplace reduced cynicism of all involved. Second, we
separated the process into two meetings with the supervisor, where the first meeting was dedicated only to stories and creating a
good atmosphere. Finally, we consulted with the managers over several drafts to determine the best way to create a user-friendly
questionnaire. These modifications were approved by the TMT.
4.2. SBPA process flow
The SBPA process consists of six main steps, as follows:
1) The first step is the first supervisor–subordinate meeting, which comprises two parts. In the first part, the supervisor uses the
FFI protocol to interview the subordinate about their best experience in the workplace (even if it was at a previous workplace).
After the interview, the subordinate is asked to write down the conditions that allow him/her to be at his/her best. In the
second part of this first meeting, the manager provides a RBSF, that is, the manager is asked to tell the subordinate a short story
regarding an aspect of work that made the manager appreciate, feel enthusiastic about and be impressed with the subordinate.
Specifically, managers were instructed to “Recall a specific event in which you were enthusiastic about your employee. Recall
details such as: What happened? What specifically impressed you? etc.” Next, the managers were instructed to say to their
subordinate: “I'm going to tell you about an event in which I was especially enthusiastic about you/your work. I would like to
ask you to listen to the event and allow yourself to enjoy it without playing down your contribution”. Moreover, managers were
instructed to “emphasize the most significant part of the story”.
2) The second step entails filling out a web-questionnaire (Appendix A). The subordinate is the first to fill out the questionnaire,
starting with keypunching the facilitating conditions found in the FFI. Once these conditions are keypunched, the supervisor
gets an alert from the system and can answer the supervisor version of the questionnaire. The supervisor is also asked to
document briefly the stories reported in the first meeting (the FFI and RBSF stories). Both subordinate and supervisor
questionnaires focus on the conditions that allow the subordinate to flourish in the workplace. The subordinate and the
supervisor evaluate how crucial was each of the conditions for facilitating the story told in the FFI, and how prevalent are these
same conditions at present. Following FFI related questions, additional closed-ended questions regarding 12 desired
SodaStream values, such as courage in business, are assessed both by the subordinate and the supervisor on two scales: “To
what degree were each of these values expressed in the FFI and in the RBSF stories?” and “To what degree are each of these
values currently expressed in your work?”. Both subordinates and supervisors are requested to review discrepancies between
how strengths were expressed in the stories and how they are expressed at work. They are asked to consider strengths that
existed in the stories but are currently missing from their work, and to suggest means to regain those strengths in their work.
They are also asked to consider the strengths that are emphasized in the stories, and to think of novel ways of applying them at
work. In addition, they are asked to consider a single behavior that must be avoided in the future.
3) The third step is the “strength-based evaluation discussion and agreement on goals”. In this step, the supervisor receives an
integrated report from the web system and prepares for the second meeting with the subordinate. In this meeting, the
supervisor holds a discussion with the subordinate designed to expand the expression of the subordinate's strengths in the
workplace. In preparation for this meeting, we offered another round of training on strengths, dealing with how to develop
strengths and how to develop a win–win approach to goal setting. Specifically, we first suggested that managers find at least
three ways to increase the strengths of their subordinates. We explained the logic of RBSF (Roberts, Dutton, et al., 2005)
according to which, people act in the world on the basis of their self perceptions and thus, the more expansive and positive the
self perception (construct) of the subordinates, the more they will believe that they could and should do at work. Thus, we
emphasized both the personal benefit for the subordinate in terms of well-being, and the business benefit in terms of improved
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performance. One way to increase strengths is to consider how, with joint manager–subordinate responsibility, to recreate the
work conditions that the subordinate needs to flourish, to find one or more ways of using an existing strength in a novel way
(Seligman et al., 2005), and by correcting the subordinate's poor self-perception when the supervisor notices much better
expression of values or conditions than the subordinate is aware of. For example, if the subordinate reported that s/he does not
show creativity, yet the supervisor sees that s/he does in fact do so quite frequently, we recommended that the supervisor tell
the subordinate about an event or situation in which the subordinate expressed creativity to a much greater degree than s/he
reported. Finally, in cases where the supervisor saw that the subordinate made exaggerated claims of strengths, the supervisor
was recommended to support these claims by recalling an example, no matter how rare and minor, in which the strength was
expressed. For example, a subordinate who overrated his/her management skills could be told: “I saw how well you organized
a farewell party. I would like to consider with you how we can expand this skill to other activities here”. Second, we offered
managers the 3:1 principle, whereby after discussing at least three strengths, they could address one weakness. In this way, we
maintained the focus on strengths without neglecting the problems or prevention goals.
4) The fourth step is creating an organizational picture of its positive core, based on the comprehensive information gathered from
the web-based questionnaires. The main purpose of the picture is to highlight the organizations' strengths as well as one area
for improvement. Building collective efficacy in the organization is a similar process to that of enhancing the individual's
strengths. It involves: (a) Expanding utilization of the organization's strengths in new ways; (b) Identifying existing strengths
that are not recognized by most members of the organization; (c) Reinstating strengths that are currently not in use. The
picture of the organization is presented first to the TMT and then to all subordinates and supervisors as part of the next step in
the “feedforward party”.
5) The fifth step is the feedforward party, which is a celebration of the best stories in the organization. In this step, HR invited the
some 120 subordinates/supervisors (including newcomers) and their spouses to an evening dinner party. Prior to the event,
the HR manager asked the SBPA participants to send in their most touching stories. During the party, stories from FFI and RBSF
were shared in a celebration of all that is positive about SodaStream.
6) The sixth and final step will occur after six months. The supervisor will hold a follow-up discussion with the subordinate to
assess the status of goal implementation and the degree to which the subordinate's strengths are being better expressed at
work. Note that at the time of writing this report, only the first five steps were completed.
5. SBPA: An initial evaluation
Two interns (undergraduate students) interviewed 50 subordinates, asking the following open-ended questions: “To what
degree did the SBPA: (a) Increase your awareness of the conditions that allow you to flourish at work? (b) Improve your feeling at
work? (c) Direct you toward improving your performance?”. The interns then sorted the responses into several categories and
reported the percentages of subordinates whose answers matched the categories. (Note: Given that responses were open-ended
and could include more than one category, the sum of the percentages could exceed 100%). In addition, we solicited TMT reactions
to both the SBPA process and to the organizational picture of a positive core (Step 4 above).
5.1. The impact of SBPA on the subordinates
The most common responses to the questions regarding the impact of SBPA on the subordinates were: a) Having quality time
with supervisors and receiving a positive evaluation (37%); b) Focusing on strengths (19%); c) Benefitting from goal setting and
learning from experience (16%); d) Better matching of competencies to assigned tasks (5%). Nineteen percent responded that it
was too early to evaluate the process.
In addition to questions regarding the impact of SBPA, the interns asked about the satisfaction of the subordinates from using
the web-based questionnaire. The majority found it to be user-friendly, as the most frequent response was that it was appropriate
(31%), helped to focus (17%) or helped to deepen understanding (17%), whereas a minority thought it created an overload (15%) or
even became an interference (8%).
5.2. The impact of SBPA on the organization
The most common responses to the questions regarding the impact of SBPA on the organization were: a) Increased the level of
empowerment, motivation and performance (49%); b) Established an infrastructure for setting expectations and goals (19%); c)
Improved communication that allows better understanding of the subordinates' needs (12%); d) Focusing on the positive
improved the organizational culture (9%); e) Improved collaboration (7%). Only a small minority of subordinates thought that
SBPA had no effect (7%).
Although the subordinates found SBPA useful, both personally and organizationally, the supervisors reported informally to the
HR department that they found it hard to use the web-based questionnaire. The work with the web-based questionnaire burdened
supervisors because they had to enter the system for their own evaluation as a subordinate as well as for each of their
subordinates. Therefore, the HR department will seek in the future ways to streamline the questionnaire while still being able to
accrue the benefits of documentation and creation of an organization-wide view of strengths.
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5.3. TMT reactions to SBPA and to the organizational picture of a positive core
In a meeting with TMT, we solicited their reactions to both the SBPA and to the aggregated map of strengths at SodaStream.
TMT noticed that SBPA puts a demand on their time as it requires of them not only to meet each subordinate but also to spend a
significant amount of time in preparing for these meetings (some of which have more than 10 subordinates). At the same time,
TMT indicated that SBPA had many benefits, among which two were especially significant: (a) SBPA contributed to building
relationships with their subordinates, a task that is crucial for their future business success, but one that without SPBA would have
been somewhat neglected; and (b) SBPA raised employees' levels of motivation and energy. Consequently, as some TMT members
indicated, the atmosphere in the corridor has changed since the SBPA process, and a positive shift in motivation and energy was
felt.
When we presented the TMT the aggregated data regarding their organization-wide strengths, we highlighted several areas of
strengths, one strength was apparent in the stories (feedforward and appreciation from the supervisor) but currently less
expressed at work, including strengths which were rated very high both as prevalent in the stories and prevalent in current
practices, and one strength that appeared relatively weak both in the stories and in its current expression at work (see the
Appendix for content areas that we considered). TMT immediately recognized the areas of strengths as reflecting their own
organizational culture. At the same time, TMT members were dismayed with their weakest area of strength. They have recognized
that the weakest area of strength as being the strategic issue they must face internally to achieve their ambitious business goals.
Therefore, they have committed to a new round of SBPA to be dedicated to exploring when and how they best expressed their
weakest strength.
In summary, most employees found that SBPA had a positive impact both personally and for their organization. They were
engaged during the training process and felt that the current process is better than the previous one. Supervisors and TMT found
the process demanding of their time but crucial for building relationships and increasing motivation and rich in strategic
implications.
6. Discussion
6.1. Commitment of TMT
One key factor in enabling the adoption of SBPA was TMT commitment. This commitment was secured by inviting TMT to
experience firsthand the benefit that they might accrue from being interviewed by FFI and from hearing appreciation stories from
others. That is, rather than trying to convince TMT to change the nature of performance appraisals and to acknowledge the benefits
of SBPA, we had them feel what it might be like to be involved with SBPA. Specifically, we taught FFI in a TMT meeting and had all
experience it. Next, one of the authors interviewed all key decision makers in the company, including the CEO. In a second TMT
meeting, we had each member tell each other member a short story about an occasion when they were impressed by the other.
These experiences were somewhat strange at first, but uplifting for most participants. This converted some key TMT players from
being skeptics to being advocates for the change.
6.2. Are the managers capable of implementing this process?
Both HR and TMT questioned whether the typical supervisor is sufficiently skilled in interviewing with FFI. Obviously, there are
significant individual differences in terms of skill and experience. Hence, our position is that even if only half the workforce
benefits from a good SBPA process, the company as a whole will benefit from it. Having said that, in reality, we saw that the
skepticism about the supervisors' abilities failed to take into account their personal strengths. One supervisor, who HR had thought
would not be cooperative, decided to celebrate the first supervisor–subordinate meeting by inviting each subordinate to meet with
her for the interview during work hours in a coffee shop. While this may be less than ideal for the FFI interview, it created a positive
buzz in the organization, and several colleagues were quick to adopt the same idea. Another supervisor, who was very skeptical
and even antagonistic during training, eventually interviewed his staff. This culminated in one of his subordinates leaving his office
trembling and crying in disbelief, saying that it is the first time in three years that this supervisor ever asked her anything about
herself. Thus, our view is that while it is true that indeed some supervisors are ineffective at conducting SBPA (just as many do a
poor job at performance appraisal or avoid it altogether), SBPA is still a much more user-friendly process for the supervisor.
Moreover, the skills and personal strengths of many supervisors are underestimated. Once they experience a benefit to their own
work life, many supervisors are capable of offering the benefit to their subordinates.
6.3. Voluntary basis
From the outset, we suggested, and HR and TMT agreed, that SBPA might not suit all employees, and some might strongly resist
it in one way or another. Therefore, we proposed that SBPA will not be mandatory and that supervisors or subordinates who do not
cooperate will be allowed to opt out. This was meant to send a message that SBPA can be truly beneficial to participants and that
we believe that most will want to participate voluntarily. In practice, most employees (81 out of 90) participated in the process.
However, we discovered that although the first manager–subordinate session was welcomed, the web-based questionnaire and
the second manager–subordinate session were perceived by supervisors to be too time-consuming. To encourage managers to
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complete the process, HR distributed little hourglasses as a reminder and placed posters in the corridors. In retrospect, it seems
that streamlining the documentation process is highly desirable.
6.4. SBPA as a practical management tool applying insights from positive psychology
Positive Psychology has become a strong trend in academia in the past decade, and its relevance to management is explored by
many management scholars (e.g., the Positive Organizational Scholarship group convened by researchers at Michigan University).
Our SBPA takes advantage of these conceptual and empirical developments, and offers a practical tool that is based on Appreciative
Inquiry (Bushe & Kassam, 2005) and FFI (Kluger & Nir, 2009), RBSF (Roberts, Dutton, et al., 2005), exercising existing strengths,
broaden-and-build theory (Fredrickson, 2001), the 3:1 principle (Fredrickson & Losada, 2005), a win–win approach (Pruitt &
Rubin, 1986), and collective efficacy (Bandura, 2006).
6.5. FFI
The FFI (Kluger & Nir, 2009) was offered as a tool to be used prior to performance appraisal, or as a replacement for
performance appraisal. It can also serve as a tool for conducting selection interviews, assessing customer satisfaction, team
building and strategy development. This case study demonstrates that FFI can become part of an organizational routine and can be
embedded with other tools to develop an HR package. Likewise, FFI may be embedded in other HR practices, for example, in
existing selection processes to provide an insight into the applicant's inner motivations, abilities and skills.
6.6. Goal setting
SBPA is coupled with goal setting, which is one of the most potent tools available to managers (Locke & Latham, 1990). Yet
recently, a debate has been raging as some scholars have suggested that goal setting might backfire by narrowing focus to neglect
non-goal areas, distort risk preferences, lead to unethical behavior, inhibit learning, corrode organizational culture, and reduce
intrinsic motivation (Ordonez, Schweitzer, Galinsky, & Bazerman, 2009). Although Locke and Latham have shown that the
problem is not in the goal setting per se, but in poor management (Locke & Latham, 2009), our SBPA shows the possibility of
addressing the concerns raised by Ordonez et al. (2009). The SBPA design is based on a win–win principle that seeks to find out
what makes people flourish while attaining business goals. This is likely to bring about an expansion of the focus in the
organization, and cause managers to consider the well-being of subordinates while fulfilling their own responsibilities. In this way,
SBPA can promote more ethical behavior, create a more open organizational culture, and increase intrinsic motivation. Thus, it
seems that SBPA may benefit from the known effectiveness of goal setting, while building a context that can be especially useful
both from the point of view of the individual employee and from that of the organization and its stakeholders.
6.7. Replication
The SBPA has received only preliminary evaluation, and it might not be suited to every organization. Therefore, we recommend
that the adoption of SBPA should be planned with HR and TMT, accompanied by a pre-planned evaluation of its outcomes, and
should implement lessons learned from previously conducted processes. Specifically, what appears to be crucial in the successful
implementation of SBPA is the securing of TMT support through an invitation to experience firsthand the benefits of various tools
adopted from Positive Psychology (e.g., FFI and RBSF). In addition, careful attention should be paid to balancing the organizational
need for documentation with the supervisor need for time. Finally, once several organizations adopt SBPA, its impact on hard
measures, such as reduction in voluntary turnover, increase in attendance and performance should be assessed.
7. Conclusion
In this paper, we reviewed the risks of typical performance appraisal both for quality of organizational relationships and for
performance. We proposed a theory-driven SBPA, which is based both on FFI and on the appreciation of the subordinate, as a
means of building relationships in organizations and promoting performance. We presented the application of SBPA in
SodaStream, and described how initial evaluation of its impact suggests that it helps build relationships and has the potential to
contribute to performance. We conclude with a call for replication and further evaluation of the potential of SBPA to overcome the
pitfalls of the traditional performance appraisal exercise.
Acknowledgments
This research was supported by a grant from the Recanati Fund at the School of Business Administration to the second author.
We wish to thank Ronit Sarig of SodaStream, Naftali Leder of LotemSystems, and all the employees of SodaStream and of
LotemSystem who co-developed with us the SBPA and gave a chance to bold ideas. We also thank Ayala Benjamin and Ayelet
Cohen who interviewed SodaStream employees.
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Appendix A. The Strength-Based Performance Appraisal (SBPA) questionnaire
The following questionnaire is administered to both subordinates and supervisors. The subordinate first keypunches the
conditions discovered in the FFI in Part 1. Once the subordinate sends the information to the web, the supervisor receives the
questionnaire with the subordinate's responses. Most questions in the questionnaire are identical for both supervisor and
subordinates. Questions unique to supervisors are noted below.
Part 1: The feedforward questionnaire
1. In the first column below, describe the conditions that facilitated your story.
2. Rate the contribution of each of these conditions to the success in your story using a scale ranging from 5 to 10,
where 10 means “crucial and essential contribution” and 5 means “important, but not crucial”.
3. Rate the degree to which each of these conditions currently exists in your work on a scale from 0 to 10,
where 10 means “the condition fully exists” and 0 means “the condition is currently not existent”.
Circle the condition in which you find the most significant gap between the degree of “contribution to my story” and the degree
of “existence at my work”. What can you do to reduce this gap?
Answer the following questions: (a) What will prevent you from reducing the gap? (b) How will you overcome this obstacle?
(c) In light of (b), what should you actually do to bring back the condition that helped you to be at your best?
Part2: Strengths assessment
In light of the two stories tha t were told in the meeting with the manager (your story and the story your manager told you), please
rate the following strengths on two scales: The degree to which this strength is currently expressed in your work (1 to 7 scale ranging
from “not relevant” to “extraordinary”), and the degree to which the strength was expressed in your story (1 to 5 scale, ranging from “not
relevant” to “very much”). [Note:The on-screen layout was similar to the layout used in the feedforward questionnaire (see above)].
Strengths
1. Suggests original ideas to promote the domains in which s/he is involved
2. Is open to accept others' ideas
3. Shows an open-minded attitude towards changing reality or complex situations
4. Dares to initiate changes and proceed with challenges while taking calculated risks
5. Executes tasks in the domains for which s/he is responsible despite difficulties and obstacles
6. Recruits others to do things using the power of his/her personality
7. Helps others actively when recognizes a need for it
8. Is attentive to others' needs and desires, and promotes win–win situations
9. Communicates with others with transparency
10. Compliments others naturally and sincerely
11. Gives feedback that helps others to give the best from themselves
12. Learns from errors and applies the learning so as not to repeat the errors.
13. Predicts outcomes of behavior and acts accordingly
Part 3: Summary
Answer the following questions:
How can you express your best strength in a new way for your own benefits and for the organization's benefit?
Write down one behavior that you should avoid or be careful of in the future? (Managers: write one area for improvement)
Write any additional comments.
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Part 4 — goal setting for next year
Write your goals (in a table) for next year. For each goal, indicate what measurement will be used to assess its achievement, the
deadline, and the weight of this goal as a percentage of your total effort.
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