WARNING: Performance Reviews May Stunt Your Growth

When?did?your parents stop treating you as a child and let you make your own decisions? When did your employer stop treating you like a slave and give you full responsibility for?managing?yourself? A good friend of mine is just about to complete a performance review?process for her staff. She has half a dozen people in her team, and each has to complete a 22-question?form?- twice a year. The whole activity takes between?8?and?10?hours to complete per person. That's 2 person weeks of work twice a year. A whole month! The cost of this process to the business is estimated at $35,000-$50,000. That's ignoring the fact that the people being assessed are in sales, so the lost opportunity cost runs in 100's of thousands of dollars. Does any of this sound like an over-engineered, inefficient process to you? What would be the measure of the success of this process? Loyalty, attrition, staff satisfaction, performance achievements? There should be a health warning on many performance reviews-?WARNING: This review could stunt your growth.

A while back, I stumbled across?Netflix?Culture slides. They've?been viewed over 14 million times. In it, they set out some basic principles for managing people, which align very closely with their values. They have nine values in all, and what's noticeable is how many are about individual behaviours and traits as much as corporate-driven factors: Judgement, Curiosity, Courage, Passion, Honesty and Selflessness. These are not attributes that are taught in a company; people arrive with these and exhibit them in their daily engagements with colleagues and clients.?

Netflix also makes a big play on people taking personal responsibility for their performance and engendering a high-performance culture: 'adequate performance gets generous severance packages'. No ambiguity there, then.?

They also celebrate that they are a learning enterprise where great people learn from great people and take personal responsibility for their own learning and?development. They emphasise their team ethic: 'We’re a?team, not a family.?We’re like a?pro sports team, not a kid’s recreational team.' However, they eschew aspects of the pro sports team culture, such as competition for places. Netflix wants to attract and retain?great people as they grow.?

These principles reflect the culture of the business and the degree to which people feel fully empowered and engaged.?

In his book?Path to Engagement, David Coleman?talks a lot about the importance of people being happy. Happy people create happy customers and a successful business. Something Richard Branson has been heard to say on many occasions, too, about his Virgin businesses. Happiness comes from feelings of freedom and motivation. Believing we're part of something special.?

Traditional approaches to checklist performance management have no place in progressive companies. The millennial generation seems far less interested in corporate red tape and restraints. Personal expression and well-being have more currency nowadays. And with the rise of digital innovation, machine learning and AI, it’s likely that the degree to which creativity and humanistic competencies are applied will become increasingly important. A feeling of freedom and self-determination is vital to enable any of the above.

So?perhaps three questions that need answering to bench test whether performance reviews are working:?

1. Are people generally?happy with their work and the process for reviewing performance??If not, why not - it's bound to lead to areas that need to be explored in more detail.?
2. Are staff?exhibiting behaviours that align with the values of the enterprise??There need to be tangible examples that colleagues and customers value.?
3. Are people?exceeding targets and goals??Happy people?perform above and beyond and will inevitably feel fulfilled and valued.

The OKR advocates will tell you that their method does away with the need for formal performance reviews. Objectives and Key Results tracked weekly, monthly or longer provides a cohesive system for aligning team and individual performance.

We've recently started using the Weekly10 OKR and performance management tools for Microsoft users, and it is gaining traction. It's simple to use and works in Teams, which was a big plus for us.

Perhaps I'm oversimplifying to make a point, but performance reviews' costs, productivity impact and effectiveness shouldn't be holding us back. It has to be seen to be making a positive difference.