Why Moving Away from Performance Reviews isn’t Just Another Trend

For the first time, we are seeing a major trend advocating the elimination of performance reviews and ratings for adopting an approach that emphasizes more frequent performance dialogue.

The workplace has changed to be more collaborative, social and fast moving. It's time for performance management to change too. By now, we know that our past efforts to redesign standard elements such as forms, ratings, competencies are no longer the answer.  

Regardless of how much everyone laments annual evaluations, it’s an entrenched and familiar practice. Many people have difficulty imagining the world without annual reviews and ratings. Some of the most steadfast change resistors may be your HR colleagues. You can anticipate resistance at all levels: senior leadership, managers, and individual contributors. When proposing a change, you must sway your change resistors. Socializing new ideas and alternatives is the first step in any change initiative.

It’s tempting to site the latest headlines and list the organizations scrapping old-school performance management practices, but to gain credibility for your ideas, you must go beyond the appearance of chasing the latest trend. The best way to begin is by having a firm understanding for why performance appraisals continue to disappoint. With this knowledge, you can then engage others in dialogue to help them mentally step back and question whether the system we’ve all grown to accept, ever made sense.

For socializing ideas to re-imagine performance management, I use three talking points to help stimulate new thinking and dialogue. Here are three topics I use regularly:

3 Powerful Topics to Move the Conversation Forward

1.       The validity of annual reviews

2.       The skill level of managers who write and deliver annual reviews

3.       The ability of managers to provide ongoing performance feedback (the conversations that should occur all year long)

Topic #1: “Annual Performance Reviews are an Illusion.”

I’ve become a proponent of influencing others by asking questions that promote expanded thinking and dialogue versus telling, which often comes across as lecturing. Pushing your viewpoint can create mental resistance and defensiveness – a dynamic of, “I’m right, and you’re wrong.” When talking about the validity of annual reviews try this Q&A framework:

Ask: “How many months of performance can be freshly remembered?”

Answer: “About one (maybe two).”

Ask: “So then how many months of performance does the annual performance review reflect?”

Answer: “Just the last month, realistically.”

Ask: “Then why do we call it the annual performance review?”

Answer: “Because it’s done once a year.”

Logical Conclusion #1: The annual performance review isn’t an annual review of performance, to begin with.

This supports why annual reviews should be retired, but there are two more topics to raise.

Topic #2: 86% of Managers Are Unskilled at Conducting Formal Performance Reviews.

To what extent are managers adept at writing and delivering performance appraisals? According to the Mercer 2013 Global Performance Management Survey, just 14% of managers are proficient at this task. I’ve heard countless HR colleagues lamenting the low quality of performance documents produced by managers. This isn’t surprising when you consider the lack of practice opportunities given the infrequency of this annual task. No wonder managers are limited in their ability to hone their writing and delivery skills. Compounding this problem is the lack of training provided to managers. Most training focuses on filling in the forms, guidance on applying the rating scale, and the organization’s process.

The missing elements: Specific guidance and tools on how to develop meaningful content and how to facilitate the actual 30 to 60-minute conversation.

Compounding the lack of training is that annual reviews are annual events; there’s not enough repetition to perfect the skills (even if training were to be provided). We can’t ever expect to get good at something we do once a year.

Logical Conclusion #2: Why perpetuate a process that’s done poorly/inconsistently 86% of the time?

Topic #3: 94% of Managers Are Unskilled at Having Candid Conversations About Performance.

Few would argue with the fact that it’s the manager’s job to give feedback throughout the year. If you’re an HR Pro, how often have you said:

“Performance Management should be a continual process, not an annual event.”

“Give feedback early and often.”

“No one should ever be surprised at performance review time.”

Dispensing this advice won’t actually make it happen. Reality tells a different story. Here’s another reference to the Mercer 2013 Global Performance Management Survey:

Just 6% of managers are skilled at having a candid dialogue with their direct reports.

So this leaves 94% of employees working for a manager unskilled at having candid performance conversations, regardless of how many reminders we provide.

Logical Conclusion #3: A key driver of managing employee performance is the ability of supervisors and employees to talk candidly about performance and expectations, and 6% of managers in your organization doing so just isn’t enough.

Evolving Your Approach to Performance Management

I’m not advocating getting rid of performance management, the opposite is true. We must have a framework that intentionally drives employee performance effectiveness. The traditional system must be re-imagined. How? The action that is most likely to strengthen performance contributions and the manager/employee relationship is ongoing dialogue aligning performance expectations and recognizing progress.

There’s no short cut – no magic form, app, or on-line tool that can replace person-to-person communication. HR can pave the way for the new habits of regular manager and employee performance development conversations. To do so, you must go beyond telling managers to give feedback “all the time,” and provide a framework and skills-training to build these capabilities.

The Top Four Performance Management Reforms Should Include:

1. Phasing-out annual processes that look back on the past 52-weeks for more frequent opportunities to informally discuss performance. It’s ok to have an annual documented performance conversation. Personally, I like the Performance Conversation Planning Map 1-Page Form, because the emphasis is on what’s working now and what can be done to be even more effective.

If your organization isn’t ready to change the annual process, then keep the focus on building a culture of ongoing performance development conversations that will help align managers and staff on key performance objectives and expectations.

2. Adopting a performance conversation framework, such as the monthly 10-MinuteQuestions Conversation, to ensure that managers and employees have an eyeball to eyeball dialogue [or phone or Skype/Face-Time, etc, for remote work relationships]. These conversations must go beyond talking about tasks and the work (the typical one-on-one conversations), and instead comprise asking questions, such as, “What’s one thing I’m doing that’s working that I should continue with?” and “What’s the one thing that will help me be even more effective in my role?”

If your organization isn’t ready to change the annual process, then keep the focus on building a culture of ongoing performance development conversations that will help align managers and staff on key performance objectives and expectations.

2. Adopting a performance conversation framework, such as the monthly 10-Minute Questions Conversation, to ensure that managers and employees have an eyeball to eyeball dialogue [or phone or Skype/Face-Time, etc, for remote work relationships]. These conversations must go beyond talking about tasks and the work (the typical one-on-one conversations), and instead comprise asking questions, such as, “What’s one thing I’m doing that’s working that I should continue with?” and “What’s the one thing that will help me be even more effective in my role?”

3. Providing skills training for managers and all staff to learn how to engage in conversations about performance. These skills don’t come naturally (unless you’re in the 6%), but they can be learned. Offer training to enable everyone to participate in your organization’s performance conversations framework.

4. Moving away from the traditional 5-level rating scale and adopting a better system for measuring and differentiating employee performance. Establishing a measurement system is a must. I use the Employee Performance Continuum for a snapshot-in-time to identify an employee’s “coordinates,” in relation to the two performance dimensions:

Work Results + Observable Behaviors

You can draw this four-square model on a napkin, but you can find the resource here in a downloadable form with instructions.

Conclusion

Your primary goal in 2017 should be to fix and create value within your organization’s performance management framework, regardless of your industry, geographical location or size. Question everything in your current process. Activities that do not lead to improved individual, team and organization performance should be on the chopping block. The time for action is now. Don’t wait around to see what other organizations are doing, but continue reading and researching the topic. Take the first step and begin by socializing your ideas, using the talking points I’ve outlined.

HR is poised to create a system that engages everyone and boosts organizational performance. Will there be roadblocks and people who oppose change? Yes, but keep moving. Would you rather your resume read: “Administered our performance management process,” or “Re-imagined our performance management process?” As HR Pros, our path on this couldn’t be any clearer.

Please share your success stories, challenges, creative solutions, and lessons learned with me. You can reach me at [email protected]