When annual performance review done wrong?

Every year, I have been involved in appraisal performance reviews. The result? It's useless even though I got positive feedback and a salary increase.

Other people's dissatisfaction with performance appraisals is the main reason they left. Why did the annual performance review fail? How can we do it better?

Why do software engineers dissatisfy with appraisal performance reviews?

Bias and subjective

Bias is how managers rate their members unrelated to actual performance. It's both unconscious and conscious. According to Gallup, 96% of employees do not strongly agree that their performance reviews inspire them to improve. There are a few reasons for this:

• "Accidental manager" is popular in software companies where some leaders are being promoted by technical excellence but lack of leading skills.
• In some companies, leaders only put on a supervisor's hat once a year to do performance reviews. This is extremely bad.
• Leaders are not trained to review performance, give constructive feedback, and charter a development plan.

No clear purpose and goals

Lack of goal alignment and poor communication about the purpose of the organization (team, department, company) is usually the root cause of dissatisfying performance reviews.

In some companies, especially outsourcing companies, employees only do their assigned tasks without understanding the goals and purpose. They complete their assigned task and that's it. But in software, to have a concrete task to implement requires understanding the problem, brainstorming, and problem-solving

Look at the triangle, completing a task is a bare minimum. Leaders need to help their members step up and upskill to be able to contribute to the high-value impact. The good-performing members are the ones who can do the work at the top of the triangle because it's required to go beyond and above.

Without goals align and regular feedback, annual performance reviews would lead to unfairness and demotivate.

Time-consuming and inefficient

Moreover, about 95 percent of managers say they aren’t satisfied with their organizations’ performance management processes either, and 90 percent of HR professionals don’t believe their companies’ performance reviews provide accurate information, CEB researchers found.

Alternatives to performance reviews?

Over the past several years, many well-known companies have experimented with different ways of doing performance evaluations, including eliminating them all together. Some changes have worked, some have not, and for some, it's too early to tell.

But there are important insights that we can learn from

• Provide feedback more often.??Rather than a single review once a year, the new systems tend to provide feedback more often, at the end of each major project or every quarter, for example.?Deloitte has also implemented weekly check-ins with team leaders to help fuel performance.
• Require less time to complete.?Deloitte is using only four questions, two of which require yes or no answers.
• Move from focusing on the past to focusing on the future.?Rather than reviewing an entire year’s performance at one go, these shorter, more frequent reviews are designed to help employees move forward with their careers rather than look back on past accomplishments or failures.
• Take some of the subjectivity out of the process.?One major problem with standard performance reviews is that a reviewer’s assessment of an employee’s skills says more about the reviewer than the employee. To combat this, Deloitte has changed their questions to ask what a manager would?do?with a person (promote them, incentivise them, etc.) rather than what they?think?of that person.
• Shift from a focus on employee management to a focus on fuelling employee performance.?More frequent check-ins and reviews mean that a manager has more opportunities to steer an employee towards his or her best performance.
• Shift from trying for the simplest view of performance to the richest.?Many review systems in the past were designed to try to simplify employee performance down to a single number — a rating or ranking. This new breed is more about generating a richer, nuanced view of every employee to facilitate better performance.

What would we do differently?

I personally think that performance feedback should help employees grow and adjust their performance as soon as they do not meet the expectation as we do with software, continuous feedback, and keeping the feedback loop shorter would help employees and so engaging them with the organization's strategy.

In the next articles, we will help our tech leaders how to set goals, manage expectations and have feedback from their direct reports.

References

• https://hbr.org/2016/10/the-performance-management-revolution
• https://www.shrm.org/hr-today/news/hr-magazine/pages/0415-qualitative-performance-reviews.aspx
• https://bernardmarr.com/how-accenture-microsoft-and-deloitte-replaced-annual-performance-reviews/