Performance Review Systems Are Broken

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? of all performance reviews result in worse performance is a key piece of evidence that Dave Wight of LPS Consultants shares to make the point that the performance review process used by just about every company with employees is badly broken. Dave provides 5 compelling flaws in the current system and provides the architecture of a new way that is collaborative, continuous, focused on the future, and driven by the employee not the manager. He provides a sensible 3 step process beginning with a pilot phase prior to a full roll-out to a more constructive approach to helping each employee be the best they can be. Listen to the end for the details on a compelling gift from Dave to our listeners.

Q: What is the one thing that your?target market is getting wrong?

HR Professionals need to think differently about how they can get better performance from their employees. Giving feedback to employees is fine if done properly, but that should happen in real-time.... not waiting for a person's annual Review. And a year's worth of work reduced to a number on a rating scale is not effective feedback. It's not descriptive, it's judgmental. It gives the person no information they can use to possibly do something differently going forward, but it does make people defensive.... and it's very effective if your goal is to see how many people you can piss off. Even with good feedback, you're still doing something "to" the person; it's time to start doing something "with" the person. Bring managers and employees closer together instead of requiring evaluations that just drive them apart. They need to get managers and their employees to collaborate and together learn how to produce better business results. And finally, senior managers need to realize that the only perception of this process that really counts is that of the employees because they are the ones whose motivation and behavior you're trying to influence. If they see it negatively.... something that causes them fear, pain and anger, it is not going to have a positive impact on their motivation.?

Q: How should your target market be thinking about it?

They need to reframe it as "We and Us" rather than the current "Me (the manager with the power, e.g.... because I said so) vs. You (the employee who is supposed to do what I say). And studies have shown that 2/3rds of employees say that Reviews have no or a negative impact on their motivation. Another study showed that Millennials, however, were very motivated following their reviews; over half of them began looking for a new job. Not exactly the kind of behavior you were going for.

Senior management also needs to understand that "constructive" feedback is criticism by any other name, and no one welcomes or likes it. People pretend to accept it because that's what our culture says "responsible" adults do and who wants to be thought of as "irresponsible"? But one of the first things managers learn is not to do this in front of an audience because that makes the person more defensive and intensifies all of those negative emotions. But we expect managers to give such feedback to employees and record it in their Reviews, knowing full well that HR will see it, and future managers will be able to see it. Employees know it too, It's a future audience which means those people might as well be in the room when a manager brings it up during the person's Review.

If the first time a manager talks to an employee about unsatisfactory performance is during their annual review. The manager should go on a Performance Improvement Plan (PIP) along with the employee. Poor performance is not a disciplinary issue; it's an unsatisfactory performance that needs to be improved starting today.... the sooner the better. That's your accountability. You do not need a Performance Review saying an employee's performance is unsatisfactory to terminate someone. As soon as a person goes on a PIP, or is in the midst of Progressive Discipline they come out of whatever Performance Management process the company has for other employees into one that's completely different.

Q: What are the benefits of doing it as you suggest?

Gallup estimates that Performance Reviews are so bad that 1/3rd of the time they make performance worse. If you eliminate them, you can get that performance back.?

A CEB study found that the average manager spends close to 5 weeks doing appraisals each year. This is a huge indirect cost, and most managers feel this a waste of their time given the absence of any significant improvement in their employees' motivation and performance. That is substantiated by another CEB study that found that 67% of employees thought their company's Review process and incentives, had a negative or no impact on their motivation. 90% of the companies in the US have some form of the Performance Review process. Combined with Pay-for-Performance it is the major process that companies rely on to increase motivation and continually improve the performance of their workforce. But 67% of that workforce is telling senior management that the process doesn't work. Where else in the business world do you see a process that fails to produce the desired result 67% of the time, and in fact, produces the very opposite of the desired result a third of the time, be continued?

Q: What are the 3-to 5 steps your target market should implement?

First, they need to form a small internal team of well-respected managers and employees to redesign the entire Review process. Features of that new process should include 1. No annual formal Review or Evaluation of Performance 2, It fosters collaboration between managers and employees so they work more closely throughout the entire year, focused on the only two things they need to be concerned about: Future Behavior (of each person) and Future Business Results (for which each person is accountable). Instead of increasing the interpersonal distance between managers and employees, vis a vis the hierarchy, the process should de-emphasize and narrow that distance 3. Managers and employees jointly own the process; employees drive the process. Ultimately each person is responsible for their own performance and they need to take ownership. 4. Process only applies to employees who are not on a PIP or in midst of Progressive Discipline.?

Second. after completing the process re-design, the internal team should design a pilot of the new process, with a before and after online survey to help measure its impact. Not only will the pilot enable testing of the new process but it will be particularly important to generate buy-in from the entire company. Such a pilot would typically last 3-6 months, and include 5-10 managers and 30-60 employees who report to them,.?Each group will then need training on the new process and their new roles. Following?the completion of the pilot, the team will need to assess its effectiveness and report back to senior management with any recommended changes, including changes in Progressive Discipline and Compensation programs that would be impacted by the changes in the new Performance Management process.?They should also include pre and post anonymous online surveys of the pilot to help evaluate its impact.?

Finally, it is then up to senior management to decide whether to continue with the rollout of the new process to the entire company. If they deci

SHOW HIGHLIGHTS

02:35 5 reasons why performance reviews are useless when it comes to improving employee performance.

05:35 Replace the annual review process with a continuous, collaborative, future-focused, feedback systems that employees drive, not their managers.

07:25 The strong case to ditch the old and embrace a new way of giving performance feedback.

11:03 3 implementation steps to adopt a continuous, collaborative feedback system.

13:09 Learn about Dave. Email Dave at [email protected] or call him at +1.908.441.6217.

ABOUT DAVID WIGHT

Dave Wight has spent his entire career as an internal and external performance consultant to help managers and leaders become more effective. He has designed and implemented Performance Review programs and created Performance Review training for a variety of different companies. The in-depth knowledge he gained led him to start-up his own consulting firm, LPS Consultants with the design of a unique Performance Management process that replaces the annual Performance Review that just pisses people off. While both simple and powerful, this new process gets, managers and employees, to collaborate and learn how to produce better business results

ABOUT CENTRICITY

Jay Kingley and Taz Sadhukhan founded Centricity?to help the ex-corporate professional turned consultant remove the uncertainty and cross the chasm of just paying their bills to 3-5x'ing their corporate income. Their signature program, The Tipping Point?, is a?client generation advisory program?for those who have an Expertise-As-A-Service business. These independent consultants are great at what they do but struggle to make more money, get more clients, and don't know where their next client will come from. Clients focus on laser-like clarity on their positioning to differentiate them to rise above the competitive landscape and marketing strategies designed for independent solo consultants. Jay and Taz have a combined experience of 50+ years as business owners selling to large multinationals, consumers, and small business owners.