Sack off the Appraisal? Or Sack the Employee? Changes to performance reviews in the modern HR landscape.

Strengths? Financial Analysis and data modelling.
Weaknesses? Gluten intolerant. Short Sighted.

It’s annual appraisal time, and many employees will be quite literally shaking in their boots as they head into the ‘dragons den’.

Once regarded as an opportunity to boost pay, openly express issues and perhaps help bosses understand just how exceptionally you’ve performed, many now regard these sporadic review meetings with trepidation, with some employers seizing this annual / bi annual meeting as a place to chastise or ‘rate and rank’ the already nervous employee. At best it’s an opportunity to defend yourself, at worst it’s an Apprentice style mugging based on interrogation and blame shaming. If you’re not careful, this could be the meeting that gets you fired.

It was a recent article I read on the BBC that brought this HR issue to the forefront. The feature focused heavily on the current issues and ‘rebirth’ of the annual performance review, stating “this clumsy method of evaluation, which ranks, grades and irritates employees across the world, is being re-appraised - and found wanting, by some firms, at least.”

With companies including Microsoft, Google, Accenture, Deloitte and even the godfather of ‘rank and yank’, General Electric (who has openly admitted they review their 300,000 employees before firing the ‘bottom’ 10%) all reshaping their review process, it begs the question ‘what exactly are businesses doing to upgrade employee performance reviews?’ We all know that priorities and goals are constantly shifting in business, so how can we flip what has become an infrequent and potentially destructive process into something constructive and useful? 

Here are some of the ‘new wave’ performance review strategies I like:

1.) Creating a Culture of Feedback.

Many companies are trying hard to remove structured performance reviews completely, instead attempting to move toward a ‘culture of feedback’ – the consensus being that feedback encourages growth. One manager on Quora noted (quite sensibly in my opinion) that, “the most important thing you can do is to grow your reports. Growth = long term happiness AND higher performance. So it is a no-brainer that you should focus on growth. 

Feedback provides the proper context for team members to understand their roles, and with it regular feedback loops are created. Problems and challenges are surfaced early on, allowing managers to make timely organisational decisions.

People react well to both constructive and positive feedback, and most people need a combination of both. Where most managers go wrong is that they apply the same feedback ratio to EVERY employee. This will lead to confusion, sub-optimal performance, and slower growth. As a manager, your job is figure out the ratio of feedback that each of your reports need and give it to them. By assessing frequently through feedback, you’re more likely to find this balance.

2.) Continuous, lightweight reviews

The tech industry has, of course, found a different answer to update old school review processes, now offering companies – both big and small – the opportunity to implement a system of continuous, lightweight reviews. It goes something like this:

• The company uses decides how often they want feedback through the system from employees
• The software asks employees to write something similar to a weekly P4 status report. P4 = Priorities, Plans, Progress, Problems. 
• The information is posted somewhere easily accessible to managers so they can read, digest and act quickly on issues.

The benefits of this type of review are many, but apart from the obvious plus - that issues will be identified and dealt with quickly - the one major bonus that stands out for me (and many other opinions I’ve read) is that of memory. Now it might just be my age, but memory seems to me to be inherently unreliable. By conducting ‘old school’ infrequent reviews, managers may feel like they don't have enough information to make a confident performance assessment. The result? Rating an employee’s performance based only on the last several weeks leading up to the review. This means that a below-average performer who starts to improve at the end of the year or quarter can ’cheat’ the system or a solid performer who is suddenly encountering challenges can taint an otherwise excellent work record.

There are now numerous tech systems that do continuous, real-time, semi-structured feedback that adds up, over the course of months or years, to a real picture of how the person is performing, and gives both the employee and managers a way to build upon that.

3.) Making more of structured review processes

A perfect example of this might be Google, who have retained only having reviews twice a year (one major one at the end of the year and a smaller one mid-year), but added numerous facet to the process to bring it into the 21st century.

According to an ex Google employee, each review consists of a self-assessment, a set of peer reviews, and if you're applying for a promotion, reasons for why should be promoted to the next level. Each review component is submitted via an online tool. Around performance review time, it's not uncommon to see many people taking a day or more just to write the reviews through the tool. This is one thorough process.

In the self-assessment, employees are asked to summarise major accomplishments and contributions since the last review. They’re also asked to describe strengths and areas for improvement; typically framed with respect to the job expectations described by the Google career ladder. For example, if you're a senior engineer, you might write about your strengths being the tech lead of a current project.

For peer reviews, employees are expected to choose around 3-8 peers (fellow engineers, product managers, or others that can comment on their work) to write their peer reviews. Oftentimes, managers will also assign additional individuals to write peer reviews for one of their reports, particularly newer or younger reports who may be less familiar with the process.

Does HR need to reassess the performance review process? Do you have a favourite strategy for reviews? Is more frequent feedback the way forward? What does your company do to ensure they get the most from reviews?

My personal opinion is that good performance reviews are not really performance reviews at all. They are a continuation of the ongoing conversation between an employee and their manager.

What do you think? As always, I’d love to hear your feedback.

Mark.

A psychology graduate, road cyclist and hands-on father of two, Mark Gardiner founded headhunting firm Charles Warwick to dispel all negative preconceptions about his profession, with transparency, service and value lying at the heart of both his business and his professional ethos. Connect with Mark Gardiner on LinkedIn and get involved in the lively HR, recruitment and business debates!