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the solution(s) depend upon the companys specific objectives for performance
review, and its culture. Socializing a formal position statement about performance
review changes is a great first step in order to answer questions about change.
Objectives can be surfaced, clarified and even redefined. With that in hand youll be
able to rip right through questions like that one.
Regardless of the specific change, amongst executive chambers questioning a
familiar, yet frustrating, performance driving program causes hesitation, and fear.
There are those who cling to the known, and those who question it, in search for
something better. Many executives continue their defense of the old system
believing reviews, ratings, and rankings bring a sort of disciplined rigor to the
overall management process. It's no wonder the annual performance review has
persisted for so long. They've proved useful to employers for keeping employees
accountable, rewarding those that excel, and tracking performance over time. As
Im sure youve experienced, I have exchanged more than a thought or two with
executive power players and board members who continued to carry a torch for
yesterday, even in the face of so much strife. Quite frankly, on occasion I might
have been tempted to set that system ablaze, with their own torch.
And then we have a camp of executives who clearly see that performance reviews
now cause as many problems as they solve. They say it is true, the annual
employee evaluation that many business executives consider a pillar of best
practices may in fact be an outdated process in need of an overhaul. Instead of
guiding managers to coach employees, companies continue the old way of training
them merely to cover their bases. With so many reviews based on traits,
assessment is subjective and biased, and the conversation lacks credibility.
Burdensome and stressful, managers seek the necessary data, attempt to
remember a years worth of performance examples, and attempt to squeeze in the
time to write a properly worded review and tell the employees how their
performance has been characterized. This costly process is stressful for employees
too, and wen its over, they reject an assessment of their performance as lacking
credibility. It simply doesnt achieve the goal of driving better performance, and
may actually hurt performance. Samuel Culbert, a professor at UCLA's Anderson
School of Management, told The New Yorker he doesn't think performance reviews
work "in any form. I surmise he supports total annihilation and he too would set
torch to process paper.
The Case for Change
What a bold move that would be. 100 years in the making, performance reviews
entered our culture in the early 1900s. Let the ashes of the old give rise to the
performance utopia phoenix. Changing the performance review program is
tantamount to the French Revolution in 1789. It forced thinkers all across Europe to
reassess the ideas of human rights, political equality, and the rights of women.
Revolutionizing the concept of the performance review will change a companys
performance culture as everyone, everywhere will be required to reassess how they
lead their teams performance. This change is a loaded proposition not to be
considered lightly. Those HR executives were right to withhold their responses to
that provocative question about adopting a new approach to performance reviews.
Heres a great answer, Hold onto your horses, lets clarify our objectives. Wise
words, indeed. Isolating and discussing the problem is the first step. Thoroughly
exploring performance review objectives, vetting the problem and solutions, and the
importance of changing those specific elements over other elements. Your case for
change should include both the positive outcomes expected, along with negative
implications to the success of both people and the firm.
To address a comprehensive transformation, each element must be called out so
that it may be understood in its current state and how it drives value in the future.
Im simply suggesting that a change of this scale is served best through a position
statement that will likely stimulate a re-evaluation of what the performance review
is supposed to gain. What if these become more focused? Wouldnt the process,
via its elements, be equally focused? Hopefully the focus is high performance.
Now that would be position others would adopt. Make the case more compelling by
including testimony of credible, trusted employees at all levels and functions,
from every corner of the organization. One of our member HREF companies
referred to this as their canary group. Think about coal mines and the practice of
canaries alerting the miners to danger. They will ensure the proposition wont go
down a wrong path, and instead will be invaluable in identifying the critical issues
and addressing them with realistic solutions. Remember, youre proposing a
performance revolution, so be specific, clear, credible, thorough and compelling for
the best chance of being heard, adopted, and implemented.
Fix These Three
What do you think? Is your performance utopia built through transformation or
elimination? My advice: STOP. For many, the problem is not about having a
program. Its with the program itself. Perhaps starting your search in the three
troublesome categories surfaced by the HREF. Those three categories are listed
below with some of their common hallmarks.
Demotivating, leading to disengagement. Traditional reviews simply do not
promote good manager/employee relationships. At many companies, the
performance review process is incongruent with their values-based, vision-driven
and collaborative work environments. Traditional reviews use a biased, one-person
point of view like a film critic giving their own opinion, based on their preferences
only. Managers can remember what their employees did yesterday, let alone six
months or a year ago. That must certainly disengage employees. The one-way
delivery of assessment, including a full list of positive and negative drains the
managers energy, and with so many reviews, it becomes an exercise on the
checklist. Its just as stressful for the employee whose expectations plummet. As
barrister, jury, judge and executioner, the manager has tough role to play, and it
doesnt serve to strengthen relationships. Employees certain dont look forward to
meeting with the manager who is taught to find something to fix in everyone. Oh,
its supposed to add value with a developmental purpose. Unfortunately, managers
have much of a role model to follow. They dont receive feedback from their bosses
any better than they provide it. Todays review, in fact, further impedes personal
growth when employees, in the face of intimidating power. Their refusal to bring up
weaknesses that if were improved could help them perform better, for fear that
beginning of the year may be completely out of date by the end of it. Unless
managers check in with employees more often, a single conversation at the end of
the year can be pointless.
Examples of Change
Three HREF executive volunteered to share how their companies approach
performance reviews. One firm, Company A, recently completed a change in which
its executives sought to replace a complex rating and ranking process with an
objective performance and talent management process. A 41-point complex rating
system gave way to five simple buckets. Moving from quarterly to twice per year,
quarterly objectives which flow from level to the next, are evaluated. Each objective
is comprised of metrics and deliverables removing previously subjective ratings.
Where there are now objective ratings, once existed very subjectively evaluated
competencies whose definitions were often misunderstood and lacked consistency
of assessment. Now, competencies are addressed throughout the year, on the job
and outside the review process. Still requiring an understanding of the performance
across the company, Executives are provided a comprehensive, department level
bell curve, which today is not forced is in the past. Executives use of the curves is
their way of normalizing results. Comparisons between departments stimulate
discussions amongst executives making comparison between departments. A
leader by go back his/her team as they listen again to performance and ratings,
seeking calibration from the performance of one person to the next. But,
performance levels, or rankings, and associated ratings, are not reported, rolled up,
or cause an individual to be spotlighted at an organizational level. That stays at the
until level where performance is actually managed.
Company B took another approach, yet with some similar elements. Recognizing a
complex and burdensome process that needed to morph into something lighter
and easier was all these executives needed to get started. Establishing
performance objectives was inconsistent and subjective. Now, organizational
objective setting serves in the center of the performance review. Goals are truly
objective and they are checked in on at mid-year. The believe the objectivity and
ease of performance ratings enabled a more credible salary merit process, which
has been automated taking the administrative burden out of the managers
workload. They also recognized that performance was getting lost as employees
identified themselves with overall ratings, 1-2-3, etc. Such fixation distracts from
discussions about strengthening performance. In fact, it wedged strained
relationship between bosses and employees. No surprise, overall ratings were
eliminated. Individual performance objectives remained, as employees and
managers alike found them helpful. Another key to simplification, and increasing
effectiveness, is the new role played by HR. These professionals are now helping
leaders with making the performance review, especially the discussions, more
effective. Employees are provided regular and continual feedback. As the company
works toward the end of the annual performance review form, HR is helping leaders
with effectively providing daily feedback, and performance coaching, to their team
members throughout the year. Done properly, annual performance objectives will
be assessed as the year unfolds. Continual coaching ensures on-target and off-
genuine. Which means the form has no role in effective feedback and
conversations.
LIBERATE MANAGERS AND HR. Liberate the role of process cop. Separate it
from the Human Resources job description, and instead expect them to serve as
performance consultants and coaches. Have them focus attention on ways they can
help grow the high performance culture. Expect HR to help train managers to be
great coaches. They should consult with managers on the effectiveness of their
ability to coach and lead toward high performance. In liberating HR from the cop
role, managers must then be empowered. For starters, managers wont have HR
looking over their shoulders, which means that theyll need to use their own
judgment. Those who understand great coaching in a culture of high performance
will police themselves. Empower your managers by fostering open communication,
ensuring clear context, allowing safe failure, clearly defining roles, requiring
accountability, supporting their independence, and appreciating their efforts. If
they are a cultural fit, and you trust them, theyll do whats right.
Conclusion
News coverage will continue to shed light on this process that creates a tense
relationship between employees, managers, and the company that employs them.
Many will call out the diminishing role such an old process has today in growing
organizations. Such news will cause many HR teams to take a hard look at their
performance review processes, with 100 year old roots. These antiquated
processes are demotivating, lack relevance, and have become overly complex and
burdensome. Armed with these facts, HR directors will bring their case for change
before two camps, one clinging to the familiar, and another willing to embrace it,
yet blind to its form. What both sides may not clearly understand is that theirs, like
most firms, performance management systems don't need to be replaced; but they
are crying out for change. Nonetheless, for some, transformation of any sort may
be far into the future. Whatever is your definition of a performance utopia, and
whatever or whenever your transformation may be, ensuring your managers are
great coaches, providing ongoing, effective feedback and open communication cant
wait another day.
What will you do next?