This is what your performance reviews should look like to support learning and development.

It’s that time of the year again: the mid-year reviews. We ask our employees to sit down and review what they have achieved in the past six months, identify their points of improvement and set development goals for the next half a year.

If the manager leads this conversation as a coach and asks thought-provoking questions, some people will be lucky enough to have the space for reflection and learning. But the reality often looks different and employees end up wondering if and what they are actually learning during this process. Which part of it it’s about their development, and which part it’s purely about getting those ‘exceeds expectations’ ratings they need for a salary increase or a promotion next year?

Performance reviews are pretty straight forward when you just onboarded someone on a new role. As new employees work to make that role their own, their progress is visible, and so are their strengths and weaknesses. The manager and the employees themselves usually know what goes well and what they still need to improve. This task becomes increasingly more difficult as the employees you are reviewing have worked for the same company, sometimes in the same role, for some years now. The managers had these conversations already in the past, but the employees still won’t make those final improvements towards mastery of their role. That little extra that managers are looking for before promoting someone. So how do we further develop these people that are already doing a good job, that know the company inside-out and have a steady level of performance and knowledge? Especially when they themselves want to grow.?

A couple of weeks back, I was reading “Atomic Habits” by James Clear and after several chapters of practical tips and tricks on how you can create good habits and break bad ones, he closes the book with “The downside of creating good habits”. Wait, what?! There is a downside of creating good habits and you are telling me this now? At the end of the book??

Clear writes that, at first, each repetition builds fluency, speed and skill. The habit building phase get’s us from ‘not knowing’ to ‘knowing enough’ and that’s when the so-called autopilot kicks in. The new habit is formed and we don’t need any more brain resources when using that skill anymore, it becomes automatic.?

I found the path towards skill automatisation beautifully explained by Stanislas Dehaene in his book “How we learn”:

1. When confronted with a new task, we need attention to precede learning. Anything that doesn’t capture our attention, doesn’t exist, and thus cannot be learned.
2. Once aware and attentive, we have to actively engage with the new information/, challenge or situation: experience it, reflect on it, analyse it, link new learnings to previous knowledge, elaborate on the new material, discuss, debate, explore, be curious, make predictions, test them, correct them. We have to be immersed in that experience and process what it is we are learning at a deeper level.
3. During this active engagement process, we need to receive what Dehaene calls ‘error feedback’ if we want learning to happen. The brain learns only if it perceives a discrepancy between what we expect and what we get. Learning happens when we are surprised.?
4. The last step in the learning process is called consolidation. Through repetition, active engagement and error feedback, mental models are perfected and the new skill/ ability turns into routine behaviour, thus freeing up resources for us to focus and learn new things. This the goal of any learning process: to consolidate and automate the skills/ information for easy, effortless retrieval in the future.?

And this is precisely what Clear defines as the "downside" of creating new habits.

Once the autopilot kicks in, we stop thinking about how we can improve that skill even further and we fail to achieve mastery as a result.

Once we know enough, we have a feeling that we are improving a skill, but what actually happens is that we are merely reinforcing our habits. Not thinking about how we do certain automated tasks means we are loosing sight of the little errors we are doing while we are at it. We develop this idea that we are ‘good’ at what we do and the feeling of pride that comes with this perception prevents us from spotting our weak points.

The tasks we are good at and we are able to complete automatically lock us in a pattern of thinking and acting, but in a VUCA world that keeps on changing every year a little faster, we cannot allow ourselves the luxury of dwelling there for too long. Strategies, ways of working and even some skills become obsolete from year to year, sometimes from month to month, as the context keeps changing around us.

If we want to be relevant and continue to add value over time, our focus needs be on identifying what should we learn, unlearn and relearn during our effort of adapting to this fast changing reality we live in.

And to be able to do just that, we need to move from the unconscious, consolidated state of our skills, to the attentive and aware state that preceeds any learning.

The question we need to ask ourselves is this. Are our old-fashioned, “Rate your performance on a scale from 1 to 5” reviews empower the managers to guide employees towards that awareness and reflection moments they need to continue learning??

Why are companies ditching their yearly performance reviews?

More and more companies have decided that performance reviews, the way we used to know them, are useless in today's reality. Here are some of the reasons why companies decide to replace them with more agile feedback processes:

• They are solely focused on the past, and not on the future. Traditionally, these reviews are based on analysing what went well and what didn’t in the past. Employees cannot change the past, but they can extract learnings from the past which they can apply to improve the future. This is where a big part of these conversations should focus on: what will you do differently next time??
• A scale from 1 to 5 is a poor indicator of learning and development. Analysing the past achievements and mistakes is very powerful if the underlying goal is to reflect, learn and use those learnings to improve people's future performance. If, however, those past mistakes are analysed and used to give employees a low performance rating, thus punishing failure,?we risk making our culture risk-averse instead of risk-seeking. An employee not reaching a goal doesn’t mean they haven’t done any learning while trying. Sometimes, failure is exactly what employees need to switch into learning mode and the most powerful lessons usually come while we are reflecting at our past failures. This got me thinking: What if this type of performance reviews reward those team members that stay in their comfort zone and reach their goals through the same old tasks and skills they know they can master, while punishing those people in your team that dare to innovate, to go beyond what they already know and set new and ambitious goals for the sake of learning and growing?

If people don’t take calculated risks and they never fail, they are not learning and your company is certainly not innovating.

• Goals change fast in a VUCA world. Employees set goals at beginning of the year, which they review 2 times afterwards: during the mid-year reviews and the end-year reviews. However, our current reality is so volatile that employees need to change their focus and goals every couple of months. Something that was relevant for them and your business in January, is not a priority in June anymore, and they are being assessed on something that now makes no sense.
• They are time consuming. Especially on the managers side that need to review their complete team. The bureaucracy that comes with this process should not be underestimated either.
• The feedback exchange is often not captured, monitored or analysed. It just dies in a HR system right after the process is completed.?
• It is plain uncomfortable for many managers and employees. The pressure of adding a grade to someone’s performance makes both parties involved uncomfortable with the process in the first place.

Some examples from those who walk this path already

Adobe was one of the first big companies to replace performance reviews with the so-called ‘check-ins’. Employees review their goals and process constantly with their managers and feedback is shared ongoing as a dialogue. Everyone has access to the Employee Resource Center where they can find one-page reference guides, videos and simple action steps to help them set expectations, give feedback, manage performance and coach for career development.?

General Electrics uses an app called “PD@GE” for “performance development at GE”. Each employee has?a series of?near-term goals, or “priorities.” Managers are?expected to have?frequent?conversations, called “touchpoints,”?on progress toward those goals and note what?was discussed, committed to, and resolved directly in the app. The focus isn’t on grading how well people are doing, but on constant improvement.?There’s an emphasis on coaching throughout, and the tone is unrelentingly positive.?The app allows users to categorise feedback?in?one of two forms: To continue doing something, or to consider changing something.

Netflix replaced the yearly reviews with a simply 360 feedback model based on the ‘START/ STOP/ CONTINUE’ method. Everyone gives feedback to everyone by answering these 3 questions: What should you stop? What should you start? What should you continue? No rating, just simple, direct and actionable feedback delivered with much more frequency by yourself, your manager and your colleagues.?

Performance reviews won't disappear because the truth is that employees want feedback, and the organisations want's to link that feedback to performance improvement. But if they are here to stay, we need to rethink the way they are implemented and transform them into something that supports employees development, growth and learning.

Because if there is anything we know for sure, is that employees do want to receive feedback related to their work.?

Ok, so what could companies do instead??

• Make performance expectations clear to your employees. Sometimes, this itself improves performance because people know what success means for their managers.?
• Replace performance rating with a dialogue about employee's own performance. The performance reviews should not put people into boxes, and definitively not against each other. Performance rating can damage team work and collaboration, especially when they are linked with decisions about salary increase, which they usually are.

Performance reviews should be about employees unique and individual development, its sole goal being finding ways to improve agains themselves, not others.?

• Turn managers into coaches. The manager should be equipped to guide employees reflection process around their performance through relevant and through-provoking questions: What went well? What didn’t go well? Possible causes? What would you like to test out next time? What would success look like? The manager’s role is to act like a coach, creating space for genuine reflection and asking the right questions while reviewing employees' performance together. They should help employees remain conscious about their performance over time as to reignite awareness and attention towards their errors.

Managers should arouse employees curiosity towards their blind spots so that continuous learning can take place.?

• Make reviews constant and often. The reality of our environment changes so fast, that goals we set for ourselves a while ago are different or irrelevant today. Managers should have weekly one-on-ones about employees work and results and ideally a quarterly deep dive into employee's performance metrics. Employees need to apply these insights fast, test out new approaches, learn and iterate if needed.

This needs to happen in rapid action-reflection-feedback cycles, and a reviews done every six months will simply not cut it.?

• Make reviews shorter and actionable. Performance reviews are efficient only when the employees leave the room with a couple of clear and concrete actions they can test out and apply. When building these actions together, the manager needs to ensure that the actions they agree upon are neither too simple, not too complex for the employee to achieve. Stimulate their development with new projects?that are challenging enough not to be discouraging (check out the ‘Goldilocks effect’). Focus on one skill at a time. Link them with personalised learning programs tailored for each employees development needs.

Stimulate their development with new projects?that are challenging enough not to be discouraging.

• Use performance metrics to capture improvement. Capture the feedback, actions and measures employees and managers agree upon and assess their impact on the actual performance. Are these conversations actually helping your team members improve, or are they a waste of time? Luckily, feedback & recognition mobile apps and dashboards are making this tasks so much easier. Look for something intuitive for the end user, that allows you to capture both performance data and performance related conversations in one single place. Data analytics should be amongst the top skills every HR department should posses.

Are these conversations actually helping them improve, or are they a waste of time?

The more I read about this topic, the more it fascinates me. Because if we look at performance reviews as a one time process during the year, they seem easy. But if we regard them as key component in a culture of feedback and learning, we realise how intricate this process is and how it actually ties into business performance, company goals, L&D strategy, leadership and employee engagement altogether.

There is no "one size fits all' when it comes to performance reviews. They need to match your company's culture and support your business strategy. But what they will always have in common is this: they are about people and about their personal and professional development.