Performance Evaluations Don't Help Your Workers Be Their Best

I recently learned that Accenture -- one of the world's biggest companies -- is getting rid of an archaic procedure in corporate America: performance reviews. The decision was met with a ton of attention (and some criticism as well). But as the CEO of a coffee startup based in Silicon Valley, we don't put our team members through a useless process. Here's why. 

In my view, there are two primary goals behind the concept of traditional performance evaluations: 

Help people get better. 

Have a fair and objective merit increase system in place 

These are great ideas but how do you truly excel at each of them?  

How do you help people get better? Sitting down with your employee once a year and filling out a lengthy document that rarely taps into the essence of what helps us achieve optimal performance is not the way. As a matter of fact - it's detrimental and communicates that process trumps people. People have to trump process in order to achieve true sustainable long term success.

So, how do you help people get better? First, it's a good idea to jot down the what success looks like in each role listing the skills, characteristics and perhaps some examples showcasing success in the role. Lastly, it's about having conversations openly and regularly. Building a robust feedback driven culture that allows people to provide meaningful feedback (both positive and constructive) no matter the title or rank is key. To help people, get out there and help people. It's that simple. What an organization needs to work on is helping people (not just leaders because then your limiting yourself) understand the importance of feedback and that it's a good thing even if it's constructive. Leaders must model this and be great and not just giving but receiving - genuinely receiving. Cut the BS and help people. If your uncomfortable giving hard feedback, recognize and embrace that discomfort then take the next step - it's the only way your going to get better at it.

Then how do you create a fair system? This is where you can get creative. Every company should have a philosophy on how they show and deliver value to their people. The result of that philosophy should be a total compensation structure that's aligned with your culture and values the great people you want to retain in your organization. It could be a conversation that occurs annually that sums up how your doing and the result of that conversation can be a fair merit increase that shows your employee you value them. 

This is just one example of an area that challenges traditional thinking. I love it and you should too. Asking why is a wonderful thing. Feeling good with the answer is an even better feeling. Challenge the status quo, choose effectiveness over formality and be bold. 

At Philz, we don't do formal evaluations, we help each other be our best through meaningful and regular conversations. So far, so good but again, the key is to really focus on helping the organization get comfortable and great at giving feedback so that's where we're putting our effort. More work to do, but that's the fun of it because successes is stickiness and stickiness is moving 1000 people a foot at a time instead of 1 person 1000 feet at a time - it's ongoing and you have to be committed.