Employees don’t fit neatly into algorithms

So let’s rethink performance reviews

By Kathleen Quinn Votaw

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When you think about the change that’s happening almost everywhere at a pace we’ve come to accept, there are still some critical areas stuck firmly in the past. One of those is performance reviews, which some brave companies are rethinking with great success. If you’re waiting to see how it works for them; think you’ve invested too much in your performance software to give it up; or believe that it’s always been done this way and there’s no need to change, banish those thoughts. It’s long past time to look at employees as the individuals they are and stop trying to quantify and analyze them.

Like people, organizations are individual, and your new performance evaluation policies should reflect your unique culture. This could mean anything from creating a less formal, more frequent feedback process to eliminating performance reviews altogether, which some companies are doing. There is wide agreement that traditional evaluation systems are failing to achieve their primary purpose of improving performance. It’s becoming clear that taking a more humane approach improves teamwork, increases engagement and morale, and saves money. It’s becoming harder and harder to fit today’s diverse work environments into old-fashioned rating systems, which don’t reflect how work gets done anymore. Instead of calculating 12-month goals, we often work in week- or month-long cycles—and from home or as part of global teams, depending on the project. Traditional performance reviews can inhibit collaboration and the agility needed to serve the immediacy of customer needs.

From a people perspective, annual or semi-annual performance reviews can stall or prevent the quick professional and skills development demanded by market changes and employee expectations. In addition, younger workers crave constant feedback, continuous learning and the opportunity to grow their careers. Less formal, more frequent performance evaluation will help you attract and retain the workers of the future.

Everyone dreads performance reviews

The typical performance review focuses on the negative. They’re all about what an employee is doing wrong. Or, as Samuel Culbert, UCLA professor and early proponent of change, put it in a 2008 WSJ article: “To my way of thinking, a one-side-accountable, boss-administered review is little more than a dysfunctional pretense. It’s a negative to corporate performance, an obstacle to straight-talk relationships, and a prime cause of low morale at work … Even the mere knowledge that such an event will take place damages daily communications and teamwork.”

I would add that performance reviews are generally biased on both sides, time-consuming, judgmental and stress-causing. They end with the expectation that employees thank their boss for pointing out all of their flaws and agree to work on “opportunities for improvement.” Then both boss and employee are expected to go back to working seamlessly together–both quickly forgetting the positive and forever remembering the negative feedback.

We can replace all of that with a system that promotes continuous feedback and allows for correction, development or praise to be delivered in real time while it is highly specific and relevant. A system that provides employees with someone to turn to who knows and understands them sufficiently well to appreciate how they think and operate.

Dip or dive—options are endless

If you’re one of the many organizations still clinging to the old-school ways, you can choose from a range of options that will improve your performance review system. At the least, your reviews should be conducted more frequently and informally with the purpose of assuring employees that they are on track with their performance and in alignment with both your culture and overall goals. Every employee and every employer can benefit from more regular insight and direction.

From dipping in your toe to diving in headfirst, here are some options to consider:

  • Reduce fear and angst by making reviews less process-oriented to encourage more communication. (This requires training for managers.)
  • Replace forced rankings and performance curves with a no-ranking system.
  • Include more 360-degree feedback in appraisals and/or create peer-to-peer feedback systems.
  • Reduce bias by adding things like customer satisfaction and time spent on a project as part of performance measurement.
  • Make employees part of their own career development and performance discussions.
  • Abolish managers in favor of an “everyone leads” concept where mutual feedback is part of ongoing conversations.
  • Move from “boss-administered/subordinate-received performance reviews to two-sided, reciprocally accountable performance previews,” as Samuel Culbert suggests. Previews wound entail the boss serving as guide, coach and tutor to help a subordinate perform successfully.
  • Do away with any sort of performance review process in favor of continuous conversation as a few companies have done.

In the end, or I should say in the beginning, it’s all about hiring the right talent—people you can trust to do their best, people without “attitude,” people who fit into your culture and are aligned with your values. Give these people opportunity and flexibility and evaluate them any way you choose, performance will never be an issue.

“TalenTrust is unique. They aren’t satisfied with solely placing an employee; that employee has to be successful for TalenTrust to be satisfied.”

Karsten Voermann CFO, Mercury