Many thought leaders have recommended organizations to follow "team performance ratings" rather than "Individual performance" ratings. Many books and blogs have been written about the topic. Even though I have read the cons of individual performance ratings in the past, recent story that I heard from a friend reinforced my belief about the negative impact of "individual performance ratings" on morale of the employees.
Here is the story, John (Say, not real name), is working for a mid sized company and the company is following waterfall model of software development. John is working on a project which has tremendous pressure and tight deadlines. His project has fixed schedule and fixed budget(cannot add more people to the project too), no room for any flexibility in the project plan. The release date of the project is carved on the stone already. Just imagine what would be the fate of the developers working on this project !!
So, John went ahead and escalated this issue to his superior about the team loosing morale, loosing patience and getting stressed out on this project. Superior refused to provide any support because this project is a high profile project and if the superior tries to bail the team out or try to do anything which affects the project deadline, the Superior's "promotion" which is due this year would get affected !!
After listening to the above story, I felt that, as long as an organization has "individual performance ratings" in place, people tend to keep their individual priorities/preferences above "the team's" or "organization's" goal. In order to get good rating, Every one in the team works hard to achieve their personal goals and in the process forgetting the organization/team goals.
Taking the above story a bit further, what might happen to the project now ? May be the team would put all efforts to meet the deadline, might even don't express their concerns around stress with any one (avoiding getting beaten up during the performance appraisal). However this stress is definitely going to affect the quality of the code that the team is developing. isn't it ?
Do you have any such stories ? feel free to share them here.