The Disappearing Performance Review - Why it is NOT a good idea

A number of well known companies are stopping performance reviews and there are people applauding the situation.

"Companies who have replaced ratings tend to be anxious about it beforehand and enthusiastic about it afterward. Their employees are happier, which encourages more engagement and better performance. It should be no surprise that treating an employee like a human being and not a number is a better approach. Yet it has taken a few bold companies to lead the way and show us that life is better on the other side. Only time will tell how lasting the trend truly is, but I strongly suspect we are at the beginning of something big."*

This quote appears in a Harvard Business Review article. I wrote the following comment after reading the article.

While there may not be any numbers involved in rating people at these firms you can be certain that people are still finding ways to differentiate merit increases based on performance. Second when we decide who is high potential and who gets promoted, some form of ranking will again be happening. The only real difference is that managers will no longer have to talk to employees about this. So employees will no longer know how they are being rated. I suspect this effort will ultimately fail and in a number of years these companies will again be back to asking managers to rate employees and to discuss these ratings in a conversation about performance. It is unfortunate that they have not chosen a different path based on competence and emotional intelligence.

This lack of transparency will eventually cause people that are smiling about not having to go through what is often an uncomfortable, fruitless discussion, will become upset because they will have no idea why they don't get promoted, why there bonus is not as high they expected, and why someone else did get these things. Will they wish for a return to the traditional performance discussion meeting? Probably not, but they will not be happy. And the organization leaders will become more and more uncomfortable with the lack of transparency and secrecy. So what will emerge? A return to the staple of performance ratings with numbers? Or will a real, positive, innovative option take hold.

I wrote if people want to know how to get this right I do have a very innovative approach that will work. The real reasons performance reviews don't work were written about by Abraham Maslow many years ago. First people are uncomfortable judging one another. Second it is a normal reaction to be defensive when someone is criticizing us. Third despite billions of dollars spent on management training, most managers are not able to judge behaviors correctly, many worry about saying the wrong thing, and most find the conversations challenging, difficult and unfortunately often useless.

This is very curious since truthfully people often want to know what the person they work for thinks about their performance and in theory at least, want feedback.

And while people often say they want performance feedback, they actually don't like it when they get it. So how do we make this work.

First of all we recognize that the gift of giving feedback successfully is a special ability that most managers will never learn. Think about that for a moment. Most managers will never learn to do this well! I have worked for countless organizations, manufacturing, financial services, healthcare, technology, consulting firms, state and local government, military organizations, higher education, schools, and religious organizations. In all these organizations it was rare to find any manager highly skilled in giving feedback to others.

NOW FOR THE INNOVATION - stop asking highly regarded engineering managers, underwriting managers, operations managers, team leaders, military officers, superintendents, principals, team leaders and others to handle difficult conversations with people who work for them. Hire a specialist to interview the leaders and their team members to set the stage for highly meaningful conversations about performance. Hire experts who can understand how to judge performance and how to talk about that performance in an emotionally intelligent manner. As a trained therapist I learned how to talk to people about changing their behavior in a way that they could hear it, understand it, and do something about it. I learned how to deliver these messages in a way that anticipated defensiveness and dealt successfully with it by being genuine and sincere in an empathic way. After interviewing the leader and the team member separately I consider what I have heard and then present the plan for the conversation back to each person individually. After getting agreement on what will be discussed and making sure my approach is acceptable and satisfying to both parties we all get together and typically have an outstanding conversation.

The feedback I get is often that the conversation is the best performance review discussion that either party has ever had. In part this is due to the fact that I am a trained expert in this area.

WHY would we ever expect managers to be able to do this with challenging situations and people. If companies would hire experts to help with the performance review conversation for challenging situations the managers that participate with the expert, over time would develop these skills themselves. They would certainly become better with the people that were generally easy to review.

And the cost? Almost irrelevant in most organizations. Consider that people of talent often leave organizations because of a disappointing relationship with the person they work for. If you hire an expert who saves two to three high potential people from leaving because you help their leaders be more genuine, empathic, and trusting, the organization actually comes out ahead. The cost of the expert will typically be less than the cost to pay for replacing very talented people. Additionally as managers get better at giving performance feedback as a result of working with experts it is highly likely that the level of engagement of all their team members will go higher and there will be increases in productivity.

And yet because change is difficult, and innovations are hard to accept, people will likely continue on this journey of pretending that these informal, ongoing feedback sessions will be successful, or companies will stay with management training and pretend that their managers can hold these conversations successfully. Neither approach is ever likely to work. But you now know, having read this, that there is an alternative that does work. Hire an expert and use the expert with your top leadership groups and demonstrate that feedback can be a gift, can be meaningful, and can be done successfully even at their level.

Contact me if you would like me to work in your organization or to train you in this very innovative approach.

* https://hbr.org/2015/09/why-more-and-more-companies-are-ditching-performance-rati