Is The Traditional Performance Review Outdated?

It's that time of the year where in addition to finalizing plans and budgets for the coming year, managers and employees are engaged in conducting performance reviews.

Is the traditional performance review outdated, especially for evaluating supply chain talent?

Consider the following scenario:

The transportation manager you hired last year — in large part because of his success at reducing transportation costs at previous employers — was able to reduce your transportation spend by 17 percent this year, way above the 10 percent target you had set. You highlight this accomplishment in his performance review, and you further recognize his success by giving him an end-of-year bonus.

But does he deserve it?

If you go strictly by WHAT he accomplished, then the answer is probably yes. But if you also take into consideration HOW he realized those cost savings, then the answer might be different, especially if this transportation manager is actually despised by the carriers and 3PLs your company works with because of his "I win, you lose" approach to business relationships.

Tracy Maylett, Ed.D, the CEO of DecisionWise and a leading HR thought leader, shared the following in an August 2013 Talking Logistics episode on performance reviews:?

"Measurements are incomplete [at companies today]. They generally focus on operational metrics, operational necessities, but they miss a lot of pieces that are important. First of all, they fail to measure all the operational pieces that are important, and second of all, the vast majority of metrics today — and I can say this with full confidence because I work with a lot of companies — miss the interpersonal piece…[Companies] are measuring what gets done versus how things get done. The 'What gets done' is about did we hit the metrics, did we hit this particular percentage or this number that we needed to, but 'How things get done' is a different component that [most organizations aren't measuring well today]."

Does your company's performance review process take into account not only "WHAT got done" but also "HOW it got done"? Does it incorporate 360 degree feedback, including input from customers and suppliers?

We're exploring those questions with members of our Indago supply chain research community -- who are all supply chain and logistics executives from manufacturing, retail, and distribution companies -- in this week's micro-survey. Members will receive the results next Monday.

If you're a supply chain or logistics practitioner from a manufacturing, retail, or distribution company -- and you're interested in learning from your peers, taking the survey, and receiving the results -- I encourage you to learn more about Indago and join our research community. It is confidential, there is no cost to join and the time commitment is minimal (2-4 minutes per week) — plus your participation will help support charitable causes like JDRF, American Logistics Aid Network, American Cancer Society, Feeding America, and Make-A-Wish.

Is the traditional performance review outdated? Post a comment and share your perspective!