It’s that time of the year again and you’re spending many early mornings and late nights preparing for your team members’ performance reviews. You’re filling in the endless rating systems, backing each number with an example, pulling together a list of strengths and weaknesses, discussing their performance with other colleagues and stakeholders as well as thinking about the feedback they may give you about your leadership – insert tentative face here.
Add to that, the time you’re considering all the ‘what ifs’; What if they disagree or get aggressive or defensive with you? What if they get upset? What if you give them your feedback and they leave? Worse still, what if they still want to stay?
Performance reviews require a great deal of preparation and time. More than you realise. Deloitte’s research tells us that an annual appraisal for 65,000 staff took two million hours (yes you heard that right), that’s 30 hours per employee (taking into account everyone’s involvement). Adobe, a global software business, estimates that their annual performance reviews were costing 80,000 hours of managers’ time each year, the equivalent of 40 full time employees.
However, after all the time, sweat and 7am espressos you’ve invested, your feedback does little to improve your team members’ performance and behaviours. So frustrating, hey?
We are stuck in the past.
The concept of ‘performance management’ was introduced over 80 years ago to determine the wages of an employee, based on their performance. It was used to drive behaviours to generate specific outcomes. When employees were solely driven by financial rewards this tended to work well.
As organisations put more regular conversations into the mix there was a notable improvement in productivity and employee engagement – however that’s when the conversations were handled well.
Many organisations know that giving and receiving feedback creates greater performance and engagement. Their intent is good. Some even offer training to help their people improve their communication skills. But it often stops there. Managers and employees still ‘save up’ their feedback for the reviews every 6 or 12 months. No wonder it creates so much angst.
Many of us are still stuck thinking that a ‘robust’ six monthly or annual performance review will be enough. It won’t. In fact, the CEB Corporate Leadership Council tells us that when informal feedback, that is outside the formal review process, is delivered well, it can improve productivity by nearly 40%. Now that’s pretty compelling that conversations outside the performance reviews make such an impact.
Performance reviews are not the focus. They are a process.
Performance reviews are not the panacea for driving employees’ productivity and engagement. They are one formal process that ensures we do a review. There needs to be more.
The issue is that they are not conducted, nor used well. Not that they need to go.
Ditching them is not black and white.
I walked into a very large, publicly listed clients’ office a couple of years ago to have the discussion about becoming a ‘feedback culture’. I was asking lots of questions and gathering insights into where they were at, what’s working and what’s not. The HR Director told me that the organisation was fully committed to the process of changing their culture. She explained the CEO was repelled by the ‘outdated performance review process’. I thought, ‘Fantastic! We are on the same page’.
I learnt that the organisation had completely scrapped performance reviews. ‘Our people need to be having conversations in the everyday and not just waiting for the reviews’, she explained. Ok, I thought. I like where this is going. I started digging a little deeper to find out how it was all going. The client sits back in her chair, her shoulders drop and she suddenly looks down. ‘Not that well,’ she says. ‘Well, not really well at all. In fact, it’s worse since the only mechanism we had to have the conversations is now gone’.
I discovered that whilst the organisation was committed to the concept of a feedback culture, they lacked the capability in their people (i.e. they didn’t train them). They also didn’t set up the systems to drive regular catch ups and didn’t develop a strategy to embed it into their everyday, so that it could become a habit.
We are kidding ourselves if we think pulling the pin on performance reviews will transform the business into a conversation culture.
The CEB Corporate Leadership Council’s research with 9500 employees, including 300 heads of HR, found that 28% of people become disengaged without them. While we should make decisions for the majority, over a quarter of your workforce is worthwhile taking into account.
If we don’t do them properly it’s like throwing a child into the water to teach them how to swim.
Performance reviews often fail at engaging, motivating and improving our team members’ performance, but getting rid of the reviews is not the solution. Performance reviews can be improved, relied on less and have a change of focus. You’ve got to get commitment from the business to become more focused on the day-to-day conversations before you make any major decisions.
If you want to learn more about embedding a feedback culture download my white paper “Feedback Cultures are Game Changers” or subscribe to my blogs by filling out the ‘Stay Connected’ form on my home page.